South Africa’s agriculture GDP increased by 17.2% in Q4 2024, showing resilience despite an annual decrease of -8% due to El Niño. Summer crop production fell significantly, yet exports rose by 3% to $13.7 billion. The Agribusiness Confidence Index indicated a turnaround, with recovery expected in 2025 as favorable weather conditions emerge.
In Q4 of 2024, South Africa’s agriculture sector experienced a noteworthy rebound with a 17.2% quarter-on-quarter increase in GDP, following two previous quarters of decline, which had seen drops of -19.7% and -3.4%. Despite this upward trend, the overall annual agriculture GDP fell by -8% year-on-year, attributed mainly to significant production downturns caused by El Niño, especially affecting summer crops.
Total summer crop output plummeted by 9.1% year-on-year to 15.53 million tonnes, with maize yield significantly impacted, decreasing by 22% year-on-year to just 12.85 million tonnes. Despite this, the Q4 performance indicates resilience in the agriculture sector, bolstered by a 3% year-on-year rise in agricultural exports, reaching $13.7 billion for 2024 due to strong market demand and improved pricing.
The Agribusiness Confidence Index (ACI) serves as a leading indicator of agriculture GDP performance, showing a marked improvement in Q4, rising 10 points to 58, indicating a positive trend beyond the 50-point breakeven mark. This signals a potential recovery in the sector’s fortunes.
Modest recovery was also noted in the livestock subsector after previous disease setbacks, while horticulture thrived with minimal production disruptions due to favorable dam levels and reliable electricity for irrigation. With La Niña conditions returning, forecasts suggest a potential increase in total summer crop yields to 17.23 million tonnes in 2025, a 10.9% rise compared to 2024.
As grain prices have recently cooled from their peaks, this is expected to enhance margins for intensive livestock production systems, as feed costs lower. This shift may also alleviate food inflation pressures into the latter half of 2025, providing further positive outlook for the sector.
South Africa’s agriculture sector demonstrated notable resilience with a GDP rebound in Q4 2024 despite earlier declines. While the annual agriculture GDP still faced an overall drop due to adverse conditions, key indicators like the Agribusiness Confidence Index suggest potential recovery ahead. Positive trends in livestock and horticulture, coupled with favorable weather conditions, point towards growth prospects for the sector in the upcoming year, positively impacting food inflation and market margins.
Original Source: www.zawya.com
