The persistent load shedding threatened agricultural production at the start of the season, Agricultural Business Chamber (Agbiz) chief economist Wandile Sihlobo said yesterday.
He was reacting to the second quarter gross domestic product figures, released on Tuesday, which showed that South Africa's agricultural gross value added grew by 4.2% in the second quarter. This was after a sharp contraction of -11.9% quarter-on-quarter (seasonally adjusted) in the first quarter of this year.
"This improvement is based on the robust production conditions of various field crops and horticulture, which weren't reflected in the first quarter data because of a delayed start to the 2022/23 production season and the base effects," Sihlobo said.
However, various interventions to ease the load-shedding burden on farmers, such as load curtailment, expansion of the diesel rebate to the food value chain, and most private sector investment in alternative energy sources, all supported the production conditions.
"Notably, the rainy summer season also cushioned field crops and horticulture from the adverse effects of load shedding. Although arguably small, the recently launched Agro-Energy Fund is also valuable in assisting the sector to install alternative energy sources going forward," he said.
From Tuesday morning, Eskom implemented Stage 6 load shedding until further notice. Breakdowns were at the time at 16 210MW of generating capacity, while the capacity out of service for planned maintenance is 5 894MW. A generating unit each at Kriel and Medupi power stations was taken off-line for repairs. In the same period a generating unit at Arnot, Kendal, Kriel and Lethabo power stations were returned to service.
The 2022/23 maize harvest was estimated at 16.4 million tons, 6% higher than the 2021/22 season’s harvest and the second-largest harvest on record. Soybean harvest could reach a record 2.8 million tons. South Africa’s sugar cane crop would likely increase by 3% to 18.5 million tons in 2023/24. Other field crops and fruits also showed prospects for decent harvest this season.
Sihlobo said, "Importantly, we expect the coming quarters in the sector to show a robust performance and boost the annual growth figure to around 3% (from a revised 0.9% in 2022). There will likely be a solid rebound in the year's third quarter. The delayed harvest will probably be reflected in the data for the third quarter."
Besides the quarterly growth figures, Agbiz said the sector's key challenges were rising geopolitical tensions, deteriorating infrastructure, weakening municipalities, crime and energy supply, which all influenced farm profitability.
The South African government, collectively with the private sector, should address these issues to support long-term growth in the sector.
"Also crucial for the outlook of the agricultural sector is highlighting that El Niño’s forecast in the upcoming 2023/24 summer season is another aspect to keep an eye on, although we remain optimistic that it will have a mild impact on the sector and thus keep production at decent levels and, by extension, sustain growth," Agbiz said.
Meanwhile, yesterday the Cape Town Container Terminal said it was preparing for the 2023/24 deciduous fruit season - which ran from November to March, commencing with engagements with key stakeholders, including the Summer Fruit Industry and the Western Cape government.
Every year, the terminal exports huge quantities of fruit in refrigerated containers globally to European, Asian and Middle Eastern markets to name a few, with 183 430 twenty-foot equivalent units (TEUs) being the latest volume achieved over the 2022/23 financial year. This year, the Agri reefer projected growth volumes at an estimated 21%.
BUSINESS REPORT