Trends in South African Agribusiness in South Africa 2023

Introduction

South Africa’s agribusiness sector, made up of primary agriculture, agroprocessing and various sectors that provide inputs or services, has come under pressure from power cuts, infrastructure shortages, climate change, land reform, growing protectionism and high food prices, which are eroding its competitiveness. The agricultural products sector grew strongly in the year to end-June 2022. It has since contracted, largely due to excessive rains affecting field crops, foot-and-mouth disease affecting the cattle industry and loadshedding disrupting poultry production. Agribusiness is being shaped by key trends such as the shift to sustainable farming practices and agricultural technology (agritech).

Opportunities

Demand for agritech products can drive innovation in the sector. Sustainable farming. The AfCTA offers opportunities to increase exports of agricultural products to the rest of Africa. The health and wellness trend. The local production of cannabis. The nearshoring trend may offer opportunities for agroprocessing. The production of biofuels as demand for renewable fuels increases.

Outlook

The outlook is mixed, despite recent favourable weather and high commodity prices, which saw exports grow by more than 10% in 2022. Loadshedding, infrastructure shortages and growing protectionism threaten to limit growth. The long-term outlook could be affected by the deterioration of municipalities and geopolitical challenges, including South Africa’s position on the Russia-Ukraine war. Producers are turning to sustainable farming methods and agritech to innovate, improve yields and adapt to the growing threat of climate change.

Report Coverage

This report on trends in agribusiness in South Africa is one of several trends reports that also include trends in mining, FMCG and fintech. The report includes information on trends such as sustainable farming, export growth, high food prices, masterplans, health and wellness, agritech and cannabis. The trends reports pull together common agri-related trends.

Strengths

About 50% of production is exported. Presence of several large food businesses. South Africa’s diverse climate allows it to produce various crops. The country’s geographical location makes it suitable to supply Europe with fruit and wine.

Threats

Climate change and El Niño could reduce product. Consumers are under pressure from rising costs and food prices. Cyber attacks Global geopolitical uncertainty and local political instability. Increasing protectionism. Land reform. Livestock diseases and plant pests. Loadshedding threatens to reduce output. Poor ports, rail, water and road infrastructure threaten to reduce the industry’s competitiveness. The deterioration of municipalities. The slowing economy.

Weaknesses

Agroprocessing is a highly controlled market. Declining production due to lack of investment.