Agri economy nosedives in Q1
11 Jul 2018 - by Staff reporter
South Africa’s agricultural economy contracted by 24.2% in the first quarter of 2018 as a result of the Western Cape drought last year.
This according to the Agricultural Business Chamber (AgBiz) who said in a statement yesterday that the contraction had far exceeded the anticipated decline of 11%.
AgBiz agricultural economist, Wandile Sihlobo, said the impact of the drought in the Western Cape on the bulk of winter crops and summer fruits – including stone and grape fruits – was largely to blame.
“The aforementioned fruits are key drivers of agricultural exports, which implies a decline in production also negatively affects the export activity,” he added.
Additionally, Sihlobo pointed out that while the Agribusiness Confidence Index had proved to be a good indicator of agricultural performance over the past few years, this was not the case in the first quarter of this year.
“Factors driving each variable are quite distinct at the moment,” he said. “Confidence is mainly supported by broader positive sentiment following recent political developments in the country; meanwhile, the agricultural economy is suppressed by the tail-end effects of the Western Cape drought.”