In Q4 2024, South Africa’s agriculture GDP rebounded by 17.2%, recovering from earlier declines. The sector experienced an overall annual contraction of -8% due to El Nino effects. Livestock and horticulture performed positively, aided by better weather. Export values increased by 3%, and improved conditions forecast a potential recovery in summer crop yields for 2025.
South Africa’s agriculture sector showed resilience with a remarkable rebound of 17.2% in the GDP for Q4 2024, seasonally adjusted. This recovery follows two consecutive quarters of decline, with earlier adjustments showing contractions of -19.7% and -3.4% in Q3 and Q2, respectively. Despite this quarter’s uptick, the agriculture sector still experienced an overall annual decline of -8% due to production downturns linked to the El Nino phenomenon, which significantly affected summer crops.
The agricultural output was severely impacted, especially in summer crops, which saw a year-on-year drop of 9.1% to 15.53 million tonnes. Notably, maize, a staple crop, experienced a sharp decrease of 22% to 12.85 million tonnes. Despite these challenges, the Q4 performance highlights the sector’s resilience, with total agriculture exports increasing by 3% year-on-year, reaching $13.7 billion, driven by strong market demand and improved pricing.
The Agribusiness Confidence Index (ACI), a key indicator of agricultural performance, indicated a positive outlook with a rise of 10 points to 58 in Q4, exceeding the breakeven threshold of 50. This improvement reflects an optimistic shift in the agricultural landscape, foreseeing a recovery phase.
The livestock subsector showed modest recovery in Q4 following previous years of disease challenges, while horticulture performed well with minimal disruptions attributed to sufficient dam levels and reliable electricity supply for irrigation. Furthermore, the anticipated return of La Nina weather conditions is expected to bolster crop production in 2025, with forecasts estimating an increase of 10.9% in summer crop yields to 17.23 million tonnes.
Grain prices have also eased from their 2024 peaks, promising better margins for livestock producers as feed costs decline. This decrease is anticipated to alleviate food inflation pressures into the latter half of 2025, contributing positively to the overall economic outlook of the sector.
The agriculture sector in South Africa has demonstrated notable resilience in Q4 2024, marked by a robust GDP rebound following previous downturns. Despite an overall annual decline attributed to severe production challenges, improved export performance and positive indicators such as the Agribusiness Confidence Index suggest a hopeful recovery. Looking ahead, enhanced weather conditions and easing grain prices could signal better yields and lower food inflation well into 2025, supporting the industry’s overall recovery and growth.
Original Source: www.zawya.com
