Agribusinesses downbeat about business conditions – AgBiz
5 Dec 2017 - by Staff reporter
The Agricultural Business Chamber (AgBiz) announced yesterday (Monday) that the Agribusiness Confidence Index had fallen by 5 points in the fourth quarter of 2017.
“This essentially means agribusinesses are downbeat about business conditions in the country,” said AgBiz head of Agribusiness Research, Wandile Sihlobo. “The index was last seen in this contractionary territory during the drought season of 2015 and earlier part of 2016.”
Among the sub-indices of the index, employment, capital investment, economic conditions and general agricultural conditions were found to be behind the overall decline.
Employment declined from 59 in the third quarter to 58 points in the fourth, capital investments dropped by 20 points, confidence regarding agricultural conditions deteriorated by 20 index points and economic conditions confidence declined from 37 to 22.
“Driving the sentiment in these particular sub-indices were the unfavourable weather conditions in the Western Cape province, uncertainty regarding land reform policy, and weak global demand for maize exports, amongst other factors,” said Sihlobo.
According to AgBiz, the remaining sub-indices showed improvement – partially due to the benefits of the 2016/17 production season’s large harvest.
“Although unfavourable weather conditions played a role in dwindling confidence amongst agribusinesses, the prevailing uncertainty regarding land reform policies remains a key issue that could potentially discourage investments and growth in the agricultural sector for the foreseeable future,” Sihlobo added.