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IOL News
4 days ago
- Business
- IOL News
What do agriculture experts predict for South Africa's GDP growth in 2025?
There have been mixed reactions from the Agriculture sector and economists on expectations for Tuesday's announcement of the GDP growth for the first quarter of 2025. There have been mixed reactions from the agriculture sector and economists on expectations for Tuesday's announcement of the GDP growth for the first quarter of 2025. Wandile Sihlobo, the chief economist of the Agricultural Business Chamber of South Africa (Agbiz), said, 'One sector that some may be observing is the performance of agriculture, which last year was a significant drag on the economy. The mid-summer drought, delays in harvesting deliveries, and animal diseases were some of the challenges we encountered in 2024.' This year, the conversation should shift somewhat and become more upbeat. 'We have an excellent summer grains and oilseeds season, with the latest production forecasts by the Crop Estimates Committee suggesting a harvest of 17.98 million tonnes, up by 16% from the 2023-24 drought season. Favourable rains and decent area plantings support this,' he said. Sihlobo said South African sugar production for the 2024-25 production season is forecast to recover by 7% year-on-year to 2.09 million tonnes. 'This is also due to favourable weather conditions and the availability of sufficient water for irrigation. We have also received encouraging production data from SA Wine and Vinpro, forecasting South Africa's wine grape harvest at 1.244 million tonnes, an 11% recovery from the exceptionally poor harvest of 2024. We also see encouraging production data from citrus, various fruits, and vegetables. In poultry production, the moderating prices of maize and soybeans should help the industry in its ongoing recovery.' Sihlobo said the one area that remains a concern is the livestock industry, primarily due to the recent outbreak of foot-and-mouth disease. 'We have already seen various trading partners temporarily banning South Africa's beef exports due to the foot-and-mouth disease outbreak. Given the sizable share contribution of the livestock industry to South Africa's agricultural gross value added, its challenges are something worth reflecting on when considering South African agricultural performance.' Francois Rossouw, the CEO of Southern African Agri Initiative (Saai), said the sector is certainly in a recovery period after the excessive rain the country had. 'It was positive to see a healthy jump in our exports in the first quarter of the year, helped a bit by things running smoother at the ports. However, there are big external challenges ahead, especially when it comes to securing good access to important markets like the US and navigating hurdles in promising places like China. So, while there's some positive momentum, the outlook is definitely shaped by these significant trade issues that need sorting out.' Investec economist, Lara Hodes, said that they expect a weak quarter one 2025 reading, following quarter four 2024's 0.6% quarter-on-quarter seasonally adjusted lift, with incoming data readings for the quarter unfavourable. Specifically, industrial production (mining, manufacturing and electricity), which makes up a substantial 19.5% of GDP, declined by -2.9% qqsa in the first quarter, while the trade sector, which makes up around a further 12.5% of GDP, disappointed, she said. Hodes said the outlook is reflective of a still subdued economy, which continues to face a number of challenges, notably on the logistics front. 'Business Confidence is likely to have remained in contractionary territory at around 47, from 45 logged in Q4.24 and Q3.24 respectively. While political uncertainty has eased to an extent and the GNU is expected to endure, domestic growth remains lacklustre while global uncertainty remains elevated, with the tariff situation fluid.' Johann Els, Old Mutual Group Chief economist, said that given the performance of high-frequency data, he expects GDP growth to be negative. 'I project GDP to be - 0.1% in the first quarter of 2025. This compares to a +0.6% growth in the last quarter of 2024. The reason for the negative projection is the severe production performance in the mining and manufacturing sectors. Mining production, with a weight of 4.8% into the economy, was down more than 16% on an annual basis quarter-on-quarter, and similarly, manufacturing production at a bigger weight of 12.5% of the economy was down 9% on an annual basis quarter-on-quarter.' TLU SA general manager, Bennie van Zyl, said that there are so many interchangeables in the Agriculture sector that it is difficult to compare one year to next year. 'This is due to us having late rain, but it could still result in a good harvest. There are also farmers that haven't harvested yield yet due to the late rains. We also have farmers who are not able to sell cattle due to foot-and-mouth disease, so we have to wait and see. I'm cautious to make a prediction on the sector GDP growth.' BUSINESS REPORT Visit:
eNCA
27-05-2025
- Business
- eNCA
Beef price may drop as chicken price hikes
PRETORIA - South Africans are facing a possible rise in chicken meat prices following the government's suspension of poultry imports from Brazil. The move is in response to a bird flu outbreak in the South American country. Agricultural economist Wandile Sihlobo says the suspension should not be seen as a trade war, but rather as a necessary step to protect local consumers and the poultry industry. Following China's suspension of red meat imports from South Africa, due to foot and mouth disease outbreaks in provinces like Mpumalanga, Gauteng and KwaZulu-Natal, Sihlobo says beef prices could drop locally. South Africa's poultry produces are confident they'll plug the hole created by the suspension of Brazilian imports. The Agriculture Departments says South Africa will, however, continue to import consignments containing products packed on or before the 30th of April 2025, and heat-processed poultry products where the risk of transmitting the virus has been mitigated.
IOL News
19-05-2025
- Health
- IOL News
South Africa urged to halt poultry imports from Brazil due to bird flu outbreak
As the avian influenza outbreak continues to spread in Brazil, calls are increasing for the government to temporarily suspend poultry imports Image: File As the avian influenza outbreak continues to spread in Brazil, calls are increasing for the South African government to temporarily suspend poultry imports from the country. Brazil, the world's largest exporter of chicken, reported its first avian influenza outbreak last week at a commercial farm in the southern region. According to reports, the affected farm supplies Vibra Foods, a major Brazilian poultry producer with backing from Tyson Foods, the US-based meat giant. In response to the outbreak, several countries, including China, the European Union, and most recently Japan, have imposed trade bans to prevent the spread of the disease across borders. Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa (Agbiz), emphasised the need for swift action, calling on the government to temporarily ban chicken imports from the South American country. Currently, South Africa imports about 20% of its poultry products from countries such as the US, Argentina, and the EU, with approximately 70% of these imports from Brazil. "Given that we have struggled to address avian influenza in our domestic industry for some time, the appropriate step right now is to temporarily suspend imports of poultry products from Brazil until they are cleared," Sihlobo said. "When animal disease risks exist in countries we import from, we must act swiftly, following global practice, and limit the imports of the affected products," he said. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading Sihlobo further said that while he believes swift action is necessary, the final decision rests with the government. "Still, the regulator and policymakers must decide on this issue independently. I am merely making these remarks, judging from what we observe in China and Europe and our experiences with animal diseases". IOL Business Get your news on the go, click here to join the IOL News WhatsApp channel
News24
12-05-2025
- Business
- News24
The troubling decline of the South African sorghum industry
Despite sorghum's nutritional value and climate resilience, South Africa's production has plummeted 75% since 1990. Failed biofuel initiatives crushed farmers' hopes for new markets, while consumer demand remains weak. Without research investment in higher-yielding varieties and export opportunities, this nutritious grain's future looks bleak, writes Wandile Sihlobo. Whenever I post about the challenges in the maize industry on X, I often see responses from people arguing that South Africans should consume more sorghum. They correctly highlight the crop's nutritional value and resilience in challenging climatic conditions. But despite all these benefits, the sorghum industry has not taken off. The challenge is not that farmers refuse to plant it. This is due to its weak demand—consumers are not buying sorghum products like other staple grains. The issue of weak demand partly gave farmers hope that using sorghum in biofuels would provide a much-needed market for farmers. But this venture also did not take off. Thus, sorghum production has continued to decline in South Africa. South African farmers planted 41 150 hectares of sorghum in the 2024-25 production season, down 75% from the area we planted in 1990-91. The production is estimated at 137 970 tonnes in the current 2024-25, down by 54% from 1990-91. This is a disappointing picture, and with the promise of the biofuel industry remaining unclear, we may continue to see small plantings for some time. Let me take you back to 2014, an optimistic time for this crop. At the time, sorghum was one of the promising crops in South Africa's agriculture, boosted by the hope of developing the biofuel industry, creating jobs, and creating a new market for farmers, particularly black smallholder farmers. Mabele Fuels and Industrial Development Corporation (IDC) were the first to embrace this initiative. Mabele Fuels was to build a processing plant in Bothaville, potentially creating roughly 16,700 jobs and a market for farmers in that area. Similarly, the IDC would create jobs and a much-needed market opportunity for smallholder farmers in the Eastern Cape. These plants would utilise roughly 500,000 tons of sorghum a year, triple the volume South Africa produced then. The government was the key player in creating jobs, boosting the economy, creating a market for smallholder farmers, and reviving the South African sorghum industry. Unfortunately, the government incentives fell short, and the process did not materialise. In fact, by early 2016, it was clear that the biofuel industry was a lost dream, and farmers were opting for other opportunities, such as accessing new export markets. This was a difficult task as South Africa is not an established exporter of sorghum. South Africa's sorghum exports are concentrated in southern Africa, with key markets being Botswana and Swaziland. Fellow agricultural economist Tinashe Kapuya and I wrote a research piece in early 2015 to identify potential new markets for South Africa's sorghum industry. We found Cameroon, Sudan, and Ethiopia to be the only attractive markets on the continent, with potential for growth and low import tariffs. Japan and Mexico were globally identified as the large markets, with zero-rated tariffs for South African sorghum exports. The key question that emerged from our article was whether South Africa would be competitive enough in these markets, in other words, be able to produce the required volumes at lower costs than its competitors. This was left unanswered, and some farmers were still keen to explore these opportunities until the 2015/16 drought disrupted progress. Given the failure of the biofuel initiative, developing higher-yielding seed varieties and expanding export markets could revive the South African sorghum industry. Globally, there is a stable demand for sorghum. Still, for South Africa to participate in such an environment, it would need to increase its volumes and be able to sell at competitive prices. This calls for more research and creative ideas to save the sorghum industry in South Africa. Regarding the domestic demand, I am not as optimistic that consumers will switch to this crop, at least in the near term. Wandile Sihlobo is the chief economist of the Agricultural Business Chamber of South Africa (Agbiz).
IOL News
09-05-2025
- Business
- IOL News
FAO food price index rises slightly amid mixed commodity outlook
The Food and Agriculture Organization of the United Nations (FAO) Index for April 2025 released last week, which tracks monthly changes in the international prices of a set of globally traded food commodities, averaged 128.3 points in April, up 1.0 percent from March and 7.6 percent from the same month last year Image: Supplied The Food and Agriculture Organization of the United Nations (FAO) has reported a modest increase in its food price index, highlighting ongoing fluctuations in global commodity markets as supply and demand dynamics play a pivotal role in shaping consumer costs. In its latest release, the FAO Index for April 2025 averaged 128.3 points, marking a 1.0% rise from March and a significant 7.6% leap from the same month last year. Key contributors to this uptick included commodities like wheat, maize, meat, and dairy products. The FAO's Cereal Price Index climbed by 1.2% from March, with global wheat prices experiencing a slight boost attributed to reduced exportable supplies in the Russian Federation. Additionally, heightened demand for aromatic rice types contributed to an increase in the FAO All Rice Price Index, signalling robust consumer interest. Furthermore, seasonally tighter stock levels in the United States pushed international maize prices higher, exacerbated by recent adjustments to the US import tariff policies. With exemptions for Mexico, the largest importer of US maize, and a temporary pause on tariffs above 10% for certain trading partners, market dynamics remained precarious. The FAO Meat Price Index also saw a notable increase of 3.2% compared to March. The rise was informed by consistent international demand amid limited supply, particularly for pig meat and bovine varieties, which firmed notably in markets like Australia and Brazil. The Dairy Price Index surged by 2.4% over the previous month, further reflecting a staggering 22.9% increase since last year. However, this was tempered by the FAO Vegetable Oil Price Index, which declined by 2.3%, although it remains 20.7% higher than its year-ago level. Surges in palm oil outputs from Southeast Asian producers allowed for markdowns, while prices for soy and rapeseed oils climbed due to solid global demand. Conversely, the Sugar Price Index experienced a 3.5% decrease since March, a move largely driven by increasing concerns over the uncertain global economic landscape, which could affect sugar consumption in both the beverage and food processing sectors. Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa, said that the index was up 8% from the same period last year but still 20% down from its peak in March 2022, a month after Russia invaded Ukraine, leading to a surge in grains and oilseeds prices. Sihlobo said the mild uptick in the prices of grains, dairy, and meat had underpinned the index's mild increase in recent months. 'In the case of dairy and meat prices, there is a rise in demand, particularly in the EU area, combined with tight supplies in some places that have struggled with animal diseases. These will likely be temporary and generally mild as the supplies recover in the coming months,' he said. Sihlobo said that in the case of grains, the price increases reflect the tighter supplies in the Black Sea region. 'But this, too, may be short-lived as the general production outlook is optimistic. For example, the International Grains Council forecasts the 2025-26 global grain production to be 2.4 billion tons, up 4% from the previous year. This forecast comprises all major global soft commodities – maize, wheat, rice, and soybeans.' Sihlobo added that a closer look at the data shows that the 2025-26 global maize production is forecast at 1.3 billion tons, up 8% year-on-year. 'The uptick is expected to be in all major maize-producing regions worldwide. The 2025-26 global wheat crop is forecast at 805 million tons, up 1% from the previous season. The 2025-26 global rice production is estimated at 540 million tons, up 1% from the prior season,' he said. 'The 2025-26 global soybean crop is estimated at 428 million tonnes, up 3% from the previous season. This is an encouraging outlook for South Africa's consumer. South Africa generally imports around 1.8 million tons of wheat yearly, just under half of the country's annual consumption.' BUSINESS REPORT
