Agbiz optimistic of winter production season, but W Cape agri economy to remain flat

The Agricultural Business Chamber (AgBiz) is upbeat about 2018/19 winter grain production on the back of above-normal rainfall predictions from the South African Weather Service.

“The prospects of above-normal rainfall are just what the Western Cape province’s agricultural sector needs,” said AgBiz economist Wandile Sihlobo. “This rainfall will be critical for improving soil moisture content ahead of planting.”

However, the province’s agricultural economy is expected to remain flat due to dwindling agricultural output over the past three years as a result of the drought.

“While these developments are welcome, the Western Cape’s agricultural economy will remain lacklustre this year due to the decline in the wine and other horticultural industries,” said Sihlobo.

In 2017, the Western Cape’s winter wheat production declined by 47% compared to the previous year leading to a 20% reduction in national wheat production and resulting in a notable increase in wheat imports.

Wheat imports for the 2017/18 marketing year were forecast at 1.93 million tonnes, the second largest import volume on record.

Other winter crops such as barley and canola, which are mainly produced in the Western Cape province, declined by 13% and 11% from the previous year to 307 064 tonnes and 93 468 tonnes in 2017, respectively.

Additionally the Bureau for Food and Agricultural Policy estimates that production of wine grapes, table grapes, pome fruit and stone fruit would possibly decline by 20%, 18%, 9% and 8%, respectively in the 2017/18 season.

Sihlobo pointed out that all of these factors would constrain the province’s agricultural economic growth and labour market participation.

“The dial could perhaps turn positive if weather conditions improve in the coming winter rainfall seasons; only time will tell,” he added.

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