In Q4 2024, South Africa’s agriculture GDP rebounded by 17.2%, following previous declines. Despite an overall 8% year-on-year decline due to El Niño impacts, agricultural exports increased by 3%. Positive shifts in the Agribusiness Confidence Index and recovery in livestock and horticulture signal a potential rebound in 2025, with anticipated summer crop increases and easing grain prices.
South Africa’s agriculture sector showcased remarkable resilience by rebounding with a 17.2% increase in GDP for the fourth quarter of 2024, following two quarters of decline. The sector had faced significant reductions of -19.7% and -3.4% in GDP during the previous quarters, respectively. However, the overall year-on-year agriculture GDP fell by 8%, reflecting challenges posed by the El Niño phenomenon, particularly impacting summer crop production.
The contraction in production was substantial, with a noted 9.1% year-on-year drop in total summer crop output, resulting in 15.53 million tonnes, highlighted by a 22% decrease in maize production to 12.85 million tonnes. Despite this decline, the fourth-quarter performance indicates the sector’s potential for recovery, emphasized by a 3% year-on-year rise in total agricultural exports to $13.7 billion in 2024, driven by heightened demand and favorable pricing.
The Agribusiness Confidence Index (ACI) indicated a positive shift beginning in Q4, increasing by 10 points to reach 58, surpassing the 50-point threshold that suggests growth. This optimism aligns well with the modest recovery observed in the livestock subsector and the consistent performance in horticulture due to favorable irrigation conditions.
Anticipated improvements from La Niña weather patterns suggest the agriculture sector may recover significantly in 2025, with expected total summer crop production potentially rising to 17.23 million tonnes, reflecting a 10.9% increase. Falling grain prices may enhance profit margins in intensive livestock production and alleviate food inflation pressures as costs decline into the latter half of 2025.
In summary, South Africa’s agriculture sector has demonstrated notable resilience with a significant GDP rebound in Q4 2024, despite facing challenges earlier in the year. While the overall sector still reflects downward trends year-on-year, positive indicators such as increased exports and improved confidence suggest a hopeful outlook for recovery in 2025. Enhanced crop yields and lower grain prices are anticipated to support better margins and alleviate inflation.
Original Source: www.zawya.com
