An outlook on the agricultural sector

In an outlook for the agricultural sector post-Nampo, Paul Makube, senior agricultural economist for FNB Business, said: “The sector is on course for recovery after the devastating 2015/16 production season. However, the Western Cape and parts of the Eastern Cape are exceptions as conditions there have deteriorated with water levels in dams falling way below 20%. Despite this, Nampo provided some key insights into the sector”.

Makube summarises the outlook for agriculture as follows:

  • Positive South African potential harvest of grain and oilseed crops for 2016/17 (18,03 million tonnes).
  • Stabilisation of maize prices to current levels of below R2 000 per tonne.
  • The improved availability of sunflower and soyabean crops expected to result in lower animal feed costs.
  • The wheat crop looks promising.
  • The livestock market remains on an upward trajectory with gains across the board. Supplies are tight as a result of herd rebuilding in the case of beef and sheep.

“The strong rebound in agricultural output bodes well for inflation and consumers will breathe a sigh of relief as most grain and horticulture products and by-products should decline in price. This should assist the SARB to keep interest rates on hold for a bit longer,” concludes Makube.

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Published on Mon, 26th Jun 2017 - 09:56