After a robust expansion of 13,5% quarter-on-quarter (seasonally adjusted) in the first quarter of 2024, South Africa’s agricultural gross value added contracted by 2,1% in the second quarter.
This is unsurprising. South Africa’s agriculture has gone through the severe impact of the El Niño-induced drought in February and March, which weighed on crop yield. For example, South Africa’s 2024-25 summer crop harvest is down 22% from the previous season, estimated at 15,69 million tonnes.
Moreover, the livestock industry, which accounts for nearly half the sector’s value, faces relatively higher feed costs and lingering animal diseases (particularly foot-and-mouth disease), which all explain the underperformance this quarter.
The drought impact has already weighed on sentiment in the sector. For example, the Agbiz/IDC Agribusiness Confidence Index (ACI) remained depressed in the second quarter of 2024, reaching 38 points from 40 points in the previous quarter, the lowest level since 2009, the global financial crisis.
In sum, these driving factors of the sector’s fortunes in the second quarter will likely shape the broader performance for the year, with a likely strong recovery in 2025.
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