South African agriculture sees a mild quarterly expansion
According to data from Statistics South Africa, in the first quarter of 2022, agriculture gross value added grew by 0,8% quarter-on-quarter (seasonally adjusted).
This quarterly growth is on the back of improved activity in the horticulture industry and some field crops such as soybeans and sunflower seeds, amongst others. While the 2021/22 agricultural production season started on a downbeat footing, with excessive rains damaging some crop and vegetable fields, a breather from mid-January allowed for replanting and recovery in some fields. In addition to these improvements, there was a decent deciduous fruit harvest. Moreover, there are expectations of a large citrus harvest.
Nevertheless, farmingportal.co.za reports that South Africa’s agriculture quarterly gross value-added figures tend to be quite volatile. A mild contraction of between 3-5% year-on-year in 2022 is expected. This will mainly be on the back of a decline in some field crop harvests, combined with the base effects after two years of solid growth where the sector expanded by 14,9% y/y in 2020 and 8,8% y/y in 2021 (revised figures).
Agbiz chief economist Wandile Sihlobo said SA’s agriculture quarterly gross value-added figures tended to be quite volatile so Agbiz’s recent communication focused on the annual performance.
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“This impact will likely show in the second-quarter data. Moreover, the livestock subsector, which accounts for a substantial share of the agricultural value-added, also faces numerous challenges this year, such as rising feed costs and outbreaks of foot-and-mouth which have led to an export ban to some markets.”