Agriculture’s 3rd quarter 2020 GDP outcomes still impressive

South Africa’s agriculture GDP still came out impressive in the 3rd quarter 2020 at 18.5% quarter-on-quarter (q/q) seasonally adjusted annualised with a 0.6 percentage point contribution, according to Statistics South Africa (StatsSA).

Again, field and horticulture crops, as well as animal products came out strongly in contribution to agriculture growth. A combination of strong exports, higher commodity prices, and the huge summer crop harvest boosted revenues in the subsector.

For example, said Paul Makube, Senior Agricultural economist at FNB Agri-Business, total maize exports increased by 235% to 963,441 tons in the 3rdQ20 relative to the same period in 2019 and so far, 1.78 million tons have already been shipped for the current marketing season (May2020-April2021) which is 159% higher y/y.

Horticulture crops also saw strong exports with the total agriculture export earnings rising by 5% year-on-year (y/y) in the 3rd quarter to US3.2 billion.

Makube said that after bucking the trend of seasonal declines during the winter period as well as the height of lockdown, livestock commodity prices remained resilient during the quarter and helped lift subsector performance thereby contributing positively to overall agriculture 3rdQ20 GDP.

“With the new summer crop planting season and the harvest of the winter crops beginning in the 4thQ20, we expect the 2020 agriculture performance to finish on a high note. The recent harvest estimates of the winter crops indicate a total record crop of 2.9 million tons which is 46% up on 2019 levels. Wheat, the biggest winter crop, is estimated at up 40% y/y to 2.15 million tons which will help reduce the country’s import bill as it is net importer,” said Makube.

He continued to say that on the back of a bullish weather outlook with the La Nina pattern having taken hold above 90% chance for Southern Africa, agriculture’s outlook for the year ahead is even more positive.

“The preliminary intentions to plant report for summer crops indicates a 5% increase in planted area for the 2020/21 season to 4.15 million hectares. This is likely to increase further in subsequent reports given the high commodity prices and better production conditions. Good production conditions will boost all agriculture subsectors, thus another good year ahead.”

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