Agricultural Market Viewpoint with Wandile Sihlobo

Zambia has had an exceptional maize production season. The country is expecting its largest maize crop on record, which will provide an essential cushion ahead of the challenging production season in the upcoming 2026-27 summer.

Over the past few months, I have seen various optimistic statements from the country’s Ministry of Agriculture. But the picture became clearer when the U.S. Department of Agriculture released its World Agricultural Supply and Demand Estimates report, prominently featuring Zambia, with 2025-26 maize production estimated at 4.9 million tonnes.

This expected ample maize harvest is up 28% from the previous season and is the largest maize harvest on record. The ample harvest is due to an expansion in the area planted to 2.0 million hectares, up 17% from the 2024-25 season, and higher yields, driven by favourable La Niña rains.

This large maize harvest far exceeds Zambia's annual maize needs of 2,8 million tonnes. The country will have around 2.0 million tonnes of maize surplus for export or to boost carryover stocks into next year.

Zambia will be a key supplier of maize to Zimbabwe and other Southern African countries in need. This will build on the supplies that we already see from South Africa to the Southern African region.

Importantly, Zambia’s record maize harvest will help ensure that the country has a better start to the likely drier season in 2026-27, without already facing a maize supply deficit.

From a regional perspective, Zambia and South Africa will likely be the key countries to support those with large deficits.

South Africa also had a record maize harvest in the 2025-26 season, estimated at 17.4 million tonnes, against the annual needs of 12.0 million tonnes. The excellent rains and decent plantings were also the key catalyst behind South Africa’s large maize harvest. Wandile Sihlobo website

I am in Pretoria, and we obviously don’t have snowfall here. But I am following the snowfall issue in parts of the Eastern Cape, KwaZulu-Natal and the Free State, amongst other regions of South Africa.

From an agricultural perspective, I am more concerned about its impact on livestock – cattle, sheep, and goats. This is where harsh weather conditions would cause challenges, especially regarding feed supplies to sustain the animals.

Indeed, we haven’t heard widespread concerns, but looking at the photos circulating online, it is fair to assume that if conditions remain this way for a few days, we will start hearing reports of challenges. Already, smallholder farmers who lack feed will likely face challenges now.

Regarding crops, we are in the off-season for summer grain and oilseed. The planting will only start from mid-October. So, there is minimal challenge, and the snow will help improve soil moisture.

We must also not forget logistics – particularly for dairy farmers who must move products out of facilities regularly. This is likely a challenge in the Midlands regions of KwaZulu-Natal and for other farming entities in this region.

In essence, I can't give a view on the actual impact of this on agriculture so far. But we are following various updates from our friends on the ground. Wandile Sihlobo website

Employment conditions in the South African farming sector remain robust, well above long-term average levels. And this is an important issue to emphasise, as I have noted recently, as headlines suggest that farmers are struggling to find workers in this sector since the intensification of the immigration discourse in South Africa.

Indeed, if one looks at the data, in the second quarter of 2026, the farming sector saw a mild decline in employment. But this is broadly aligned with slowing seasonal farm activity, not necessarily other issues.

Still, the number of jobs remained at reasonably better levels. For example, the Quarterly Labour Force Survey for the second quarter of 2026, released on 11 August 2026 by Statistics South Africa, shows that the farming sector employed 944k people in the second quarter, down 2% quarter-on-quarter. But this is up by 4% from the same period last year, and well above the average of 799k jobs in this sector.

If we zoom in from a provincial perspective, most provinces experienced a mild employment decline from the first quarter of the year, except for the Northern Cape, KwaZulu-Natal, Gauteng, and Limpopo.

The annual uptick in employment (up 4% year-on-year) shows that we are generally in a year of agricultural abundance in fruits, vegetables, and various field crops, all of which are labour-intensive.

Listen to the podcast for more. Wandile Sihlobo website

The U.S. government has raised tariffs against several countries under Section 301 of the Trade Act of 1974, on the Acts, Policies, and Practices of 60 Economies Related to the Failure of Each Economy to Impose and Effectively Enforce a Prohibition on the Importation of Goods Produced with Forced Labour[1]. The South African government, private sector, and organised agriculture made submissions to the U.S. authorities against this rise in tariffs. But that message and clarification didn't find a fertile ear.

 

•⁠ ⁠A rise in tariffs that South Africa faces in the U.S. from 10% to 12.5% is not ideal, but the agricultural sector could still do better given where we are coming from: a 30% tariff. Importantly, the US has raised tariffs for a range of countries, including some of South Africa's agricultural competitors, such as Australia, Peru, and Chile, which are also at these levels. Notably, oranges, fruit juices, and nuts are still exempt from these tariffs.

 

•⁠ ⁠The U.S. remains an important market for South Africa’s agriculture, accounting for about 4% of our agricultural exports of US$15.1 billion in 2025. The main exported products include citrus, berries, grapes, wine, fruit juices, apples, pears, apricots, and nuts. Wandile Sihlobo website

The figures released by Statistics South Africa this morning show that consumer food price inflation slowed to 1.4% in June 2026, from 1.6% in May. This is the lowest level since December 2010. Wandile Sihlobo website

The likely impact of the expected El Niño on South Africa’s agriculture and food prices in 2027 is a major point of discussion among analysts and economists in the country.

By mid-2026, weather forecasts were signalling that the world was heading towards a severe El Niño. The El Niño weather phenomenon tends to have varying impacts on the many regions of the world. For southern Africa, it typically presents drought, which is negative for agricultural production.

The arrival of the likely drought is due to coincide with South Africa’s 2026-27 summer crop season.

In my work as an agricultural economist and visiting various farming regions across South Africa, I believe that in examining the likely impact of this El Niño on crop production and, subsequently, on consumer food price inflation, two major factors need to be considered.

Listen to the podcast for more. Wandile Sihlobo website

The farmers have so far delivered 6.4 million tonnes of maize to commercial silos. This season is running 14% behind last season's pace. The delays in the start of the season and the longer rainfall period are among the key reasons for this. South Africa is poised to harvest an ample 17.25 million tonnes of maize, the largest harvest on record. Listen to the podcast for more. Wandile Sihlobo website

On July 6, 206, I flagged in a note to the South African agribusinesses that we are beginning to see the benefits of the likely memorandum of understanding between Iran and the U.S. aimed at ending the war on agricultural input prices.

Fertiliser and fuel prices have declined notably from the levels we saw as recently as May 2026. That said, uncertainty remains, and it increasingly appears that the talks may end or be paused without a deal given the renewed strikes in the region. This once again presents the immense risk and uncertainty surrounding ship movements in the Strait of Hormuz.

Over the past few weeks, as the peace talks were progressing in a promising direction, we saw the benefits in the relief for fertiliser and fuel prices. The recent strikes introduce new risks to the likelihood of affordable fertiliser and fuel prices going forward, particularly if we see yet another holdup on ship movements in the region. There is considerable uncertainty now about how the neighbouring countries would react to these recent developments.

From a South African perspective, we remain concerned that as the start of the 2026-27 season nears, the fuel and fertiliser prices mustn’t see another surge. South Africa is roughly three months away from the start of the 2026-27 summer crop season in mid-October 2026.

Farmers typically place input orders well before the start of the season. Still, given that the current 2025-26 summer crop season is over a month late and maize harvest is still underway, the placement of input orders for the next season may also be slightly delayed.

The combined cost of fuel and fertiliser typically accounts for around half of the input costs in field crops. Thus, we worry about the renewed war action, which presents risks to input prices.

Having such a substantial share of input costs rising at a time when commodity prices were falling meant that some farmers would be in a tough financial corner.

Already, the possibility of financial pressures led some people to question whether South African farmers would leave some land fallow for a season.

Listen to the podcast for more. Wandile Sihlobo website

South Africa’s consumer food price inflation continues to slow. The figures released by Statistics South Africa this morning show that the consumer food price inflation slowed to 1.6% in May 2026, down from 2.8% in March. This is the lowest level in 17 months.

There was a broad deceleration across the various food products. At the core of moderating consumer food price inflation are lower prices for grains and oilseeds, fruit, and vegetables, driven by ample domestic and global supplies. We continue to believe that meat poses minimal risks to inflation, and meat price inflation has slowed in recent months. Base effects on meat prices, along with continued cattle slaughter, have helped ease price inflation. Poultry production conditions are also favourable. Wandile Sihlobo website

The South African farming sector had a broadly positive start to 2026. This is notwithstanding the challenges posed by foot-and-mouth disease in cattle, African swine fever in the pig industry, and floods in the northeastern regions of South Africa at the start of the year. Still, higher economic activity across field crops and horticulture sufficiently supported growth in the sector.

The figures released on June 9, 2026, by Statistics South Africa show that the country’s agricultural gross value added expanded by 3.9% quarter-on-quarter (seasonally adjusted) in the first quarter of 2026, from a 0.4% in the last quarter of 2025. These robust growth figures also align with the strong trade figures for the first quarter. For example, in the first quarter of 2026, South Africa's agricultural exports totalled US$3.7 billion, up 11% from the same period a year ago, according to data from Trade Map. Better exports were a function of both higher export volumes across various products and higher commodity prices.

Listen to the podcast for more context and the outlook for the year. Wandile Sihlobo website