Advertise with fastmoving.co.za
 
 

After contracting by 33,6% quarter over quarter (q/q) in the first quarter of this year, the South African agricultural economy entered technical recession in the second quarter following a further 29,2% q/q contraction.
After contracting by 33,6% quarter over quarter (q/q) in the first quarter of this year, the South African agricultural economy entered technical recession in the second quarter following a further 29,2% q/q contraction.

SA agriculture economy enters recession

ECONOMIC NEWS

AgriOrbit - Sep 5th 2018, 08:44

After contracting by 33,6% quarter over quarter (q/q) in the first quarter of this year, the South African agricultural economy entered technical recession in the second quarter following a further 29,2% q/q contraction. 

This far exceeded our expectations of a modest shrinkage of around 19% q/q. This data partially reflects the tail-end negative effects of the Western Cape drought, as well as the delayed harvest in the summer crop growing areas of South Africa, particularly the grain and oilseed production regions. This is on the back of a late start of the summer crop season due to unfavourable weather conditions earlier in the year.

As we highlighted in our note on 05 June 2018, the South African agricultural economy underperformed in the first part of this year, albeit far exceeding our expectations. This followed the 20% year over year (y/y) decline in wheat production to 1,54 million tons, 13% y/y decline in barley production to 307 000 tons, 11% y/y decline in canola production to 93 500 tons, and a decline in stone fruit and grape production, particularly in the Western Cape.

The reduction in the Western Cape agricultural output has been hard-felt because of its large share contribution to the overall agricultural economy, underpinned by higher value field crops and horticulture.

Overall, we believe that South Africa’s agricultural economy could rebound to positive territory in the third quarter of 2018. This could be supported by the expected large maize harvest of 13,8 million tons, record soya bean harvest of 1,6 million tons, large sunflower seed crop of 858 605 tons, improvement in sugarcane production to roughly 18,5 million tons, and general improvement or recovery in the livestock sector.
AgriOrbit 

Related News

Digital footprint helps farmers step into future
22/09/2019 - 09:59
The potential to increase Africa’s agricultural yields through the strategic use of data could place the continents’ farmers at the heart of tomorrow’s global economy.

Retail sales remain muted with consumers under pressure
20/09/2019 - 14:31
Retail sales for July marginally declined to 2 percent year on year as sales growth continued to reflect a muted demand in South Africa, with consumers’ discretionary income under strain.

4 reasons to be hopeful about South Africa’s economy
12/09/2019 - 14:40
Markets responded positively to South Africa’s economic growth rebounding in the second quarter, up 3.1%, and 0.9% for the year to June 2019.

Smarter mobility key to a sustainable South Africa
11/09/2019 - 13:19
The World Economic Forum has revealed that by 2050, 70% of the world’s population will be living and operating in urban areas. Considering the resultant congestion and air pollution, which are already challenges requiring mitigation in 2019, mobility and energy should be top of mind for those making the shift towards cities of the future.

Manufacturing production shrinks for second month in July
11/09/2019 - 13:01
Manufacturing production recorded its second consecutive contraction in July, in line with analysts’ expectations.