One of the interlinked industries that tends to benefit when the agricultural sector is thriving is the agricultural machinery industry. This year is no different; South Africa's agricultural machinery sales have remained reasonably robust since the start of 2025. I suspect the sales are likely to continue at this encouraging pace.

If we consider the details, the tractor sales have increased for the past eight consecutive months, while the combine harvester sales only cooled in the recent few months, having started on solid momentum.

The recent data for August also paints a mixed picture. For example, the tractor sales are up 22% y/y, with 700 units sold. Meanwhile, the combine harvester sales were flat, with five units sold. The soft sales in combine harvester sales are not a significant concern given the higher volume of sales in the past few months.

The increase in agricultural machinery sales primarily reflects the positive sentiment in the sector regarding the 2024-25 field crop, horticulture, and wine grape harvest, supported by the favourable weather conditions. The sentiment in the sector is also reasonably optimistic, with the Agbiz/IDC Agribusiness Confidence Index at 63 points in the third quarter, which is well above the 50-neutral mark.

We expect South Africa's agricultural machinery to remain strong throughout the year. In addition to the better agricultural production conditions, the interest rates have eased somewhat from last year's levels.

Also worth noting is that some farmers may continue with machinery replacement in the coming months, which ultimately supports the sales.

Ultimately, the machinery industry is benefiting from the positive agricultural conditions in South Africa.

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Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website

The Zimbabwean government has reinstated a ban on maize imports. The government believes that in the interim, there are sufficient supplies for the local market and wants to ensure maximum price realisation for the domestic producers before allowing imports. Nevertheless, it remains unclear if Zimbabwe has sufficient maize supplies for the year or will need imports later.

Zimbabwe’s 2024-25 maize production is forecast at 1.3 million tonnes, according to recent data from the Pretoria-based unit of the United States Department of Agriculture (USDA). This is just more than twice the output from the previous season, which was a drought period.

This recovery in Zimbabwe’s maize production is primarily driven by improved weather conditions and an increase in the area that farmers managed to plant for maize. If this production level materialises, then the ban may be temporary.

Zimbabwe’s potential maize harvest of 1.3 million tonnes will not be sufficient to meet the country’s domestic needs of 2.0 million tonnes per annum, leaving it to import the balance.

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Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website

After solid export activity in the first quarter of the year, South Africa's agricultural exports totalled US$3.71 billion in Q2, up 10% from the same period a year ago, according to data from Trade Map. This is again a function of both higher volumes of various product exports and better commodity prices. The products that dominated the exports list in the second quarter of the year were mainly citrus, apples and pears, maize, wine, nuts, fruit juices, dates, pineapples, avocados, grapes, and wool, amongst other products. While there remains a need for further improvement in the efficiency of the ports, there has been a material improvement compared to recent years. Agricultural export activity in the second quarter experienced less friction than in the recent past..

My writing on agricultural economic matters is available on my blog: https://wandile.substack.com/

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website

We continue to see more evidence that 2025 will likely be an uneven recovery for South Africa’s agriculture. The horticulture (fruits and vegetables), and field crops (grains, oilseeds and sugarcane) are experiencing excellent yield recovery, benefiting from better summer and winter rains. But the livestock and poultry industries face some constraints. The effects of these divergences are also clear in the jobs data for the sector, with the losses in the livestock industry. The major challenge in the livestock industry is animal disease, mainly the foot and mouth disease in cattle. We also see some risks in the sector broadly emanating from the fractured trade environment, particularly the exports to the US. We discuss all this in this episode of our podcast.

Richard Humphries and Sam Mkokeli produce this podcast.

*Wandile Sihlobo is chief economist of the Agricultural Business Chamber of South Africa Wandile Sihlobo website

South Africa's maize exports are back in the Far East export markets. These aren't new territories for our maize. We typically export to them during the seasons of abundance, such as this one.

Last season, we did not see many maize exports to the Far East. Our export activity focused on Africa. The region was hit by the drought and needed maize more than other regions for staple food. South Africa channelled its maize exports, mainly white maize, to this region.

And yes, South Africa was also hit by the drought, but we still had a relatively decent yield, and also benefited from supplies from the past season. This enabled South Africa to export more maize to the African continent. Zimbabwe accounted for 56% of South Africa's maize exports of 2.3 million tonnes last year.

We are now back in the season of abundance. Zambia has surplus maize, and Zimbabwe has a better yield, although it may still need about 700,000 tonnes of maize imports later in the season. Zambia, the second largest maize producer in the Southern Africa region, has seen a recovery in its 2024-25 maize production (this season corresponds with the 2025-26 marketing year), now estimated at 3.66 million tonnes, up from 1.50 million tonnes in the previous season, according to Zambia's government data.

Zimbabwe's 2024-25 maize production is forecast at 1.30 million tonnes, according to recent data from the Pretoria-based unit of the United States Department of Agriculture (USDA). This is just more than twice the output from the previous season. Still, it is below the 2.00 million tonnes Zimbabwe requires for its domestic annual consumption. Thus, the country may still import later in the year. South Africa and Zambia may be the major maize suppliers to Zimbabwe.

In South Africa, our maize production is at 15.03 million tonnes, which is 17% higher than the crop for the 2023-24 season. Importantly, these forecasts are well above South Africa's annual maize needs of approximately 12.00 million tonnes, implying that South Africa will have a surplus and remain a net exporter of maize.

Indeed, in the week of July 25, South Africa exported 63,897 tonnes of maize. About 79% was exported to Taiwan, and the rest to the Southern African region. This placed South Africa's 2025-26 maize exports at 428,975 tonnes, out of the expected seasonal exports of 2.0 million tonnes. The current marketing year only ends in April 2026.

In the 428,975 tonnes of South Africa's maize exports in the first 13 weeks of the 2025-26 marketing year, nearly half is the Far East markets (25% to Vietnam, 12% to Taiwan, and 11% to South Korea). These are South Africa's traditional maize export markets, mainly yellow maize for animal feed. But we didn't export during the years of drought. It is good to see them back buying South Africa's high-quality maize.

We will likely see more robust export activity later in the year once farmers have completed the harvest and there is grain in the silos for export.

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Richard Humphries and Sam Mkokeli produce this podcast.

*Wandile Sihlobo is chief economist of the Agricultural Business Chamber of South Africa Wandile Sihlobo website

South Africa's 2024-25 summer grains and oilseed production estimate was lifted again this month, by 2% from the June 2025 estimate to an expected 18.74 million tonnes (up 21% year-on-year).

There is an annual uptick in all the crops, mainly supported by favourable summer rains and the decent area plantings. This ample harvest will likely add downward pressure on prices, which bodes well for consumer food price inflation.

The recent surge in maize prices was linked to the slow harvest process and quality issues, but that should be short-lived and does not change our view of potentially moderating prices going forward.

A closer look at the data reveals that the monthly upward revisions were primarily in maize (+2%) and soybeans (+3%). Meanwhile, the rest of the other crops were roughly unchanged from the previous month. However, the sunflower seed and groundnuts were each lowered by 3% from last month.

More specifically, South Africa's maize harvest is now forecast at 15.03 million tonnes, which is 17% higher than the crop for the 2023-24 season. Importantly, these forecasts are well above South Africa's annual maize needs of approximately 12.00 million tonnes, implying that South Africa will have a surplus and remain a net exporter of maize.

Regarding oilseeds, the soybean harvest is estimated at 2.72 million tonnes, representing a 47% year-over-year increase. Sunflower seeds are up 12% from the last season and are estimated at 708,300 tonnes.

The groundnut harvest is estimated at 61,389 tonnes (up 18% y/y), sorghum production is estimated at 137,970 tonnes (up 41% y/y), and the dry beans harvest is at 74,299 tonnes (up 47%). The base effects and favourable agricultural conditions boosted the yields.

In essence, South Africa is experiencing a recovery season for its grains and oilseeds production, although some areas may face quality challenges, particularly white maize.

Still, the quality issues do not fundamentally change the available volume for milling acceptability, and food supplies, although it may weigh on farmers' profitability. We see the benefit of the solid harvest in generally softening commodity prices, now lower than last year, boding well for consumer food price inflation.

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Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website

Various factors, both positive and negative, continue to shape South Africa's agricultural sector. Starting on a positive note, early signs suggest a high likelihood that the upcoming 2025-26 summer season may also present favourable rainfall conditions across South Africa.

Current forecasts indicate a neutral season, which would be generally favourable and with average rainfall. But the occurrence of La Niña rains also remains a possibility, which helps to ease the worries of a swing from a La Niña rainy season in 2024-25 to the opposite, an El Niño.

Admittedly, South African farmers will only start looking into these prospects with greater intensity in October, when the 2025-26 summer crop season begins. For now, the focus remains on the harvest activities of summer grains, oilseeds, and citrus, among other crops.

We also continue to closely monitor winter crop conditions in the Western Cape province, which has been receiving excellent rainfall. The major crops currently grown during this winter season are wheat, barley, canola, and oats. The Western Cape produces over two-thirds of the crops, and therefore is a focus province for South Africa's winter crops.

The crop conditions are generally favourable in the province, although farmers incurred much higher costs than usual in some regions due to the snail challenge for canola. Still, they seem to be managing well at the moment. In other provinces, the winter crop is benefiting from higher dam levels following a prolonged summer rain season in 2025.

For the citrus industry, the harvest is proceeding well, and the focus remains on export markets, particularly the U.S. market. August 1 will be the end of the suspension period for the U.S. reciprocal tariffs announced in early April, and it is not clear whether South Africa will continue to benefit from the 10% duties or if they will be readjusted back to the 30% duties we faced at the onset of the Liberation Day tariffs.

The South African government, alongside organised agricultural groups and other business groupings, have all been engaged with the matter and is pushing for better market access in the U.S., along with the formulation of a trade offer for a long-term trade agreement. These deliberations may take longer than desired, resulting in additional costs to businesses. The hope is for an extension of the current access while the discussions are underway. Many agricultural industries are at risk if the talks do not yield a favourable outcome. These include the table grapes, nuts, and wine, amongst others.

Indeed, the conversation about the potential diversification of export markets has been tabled by some. However, it has limitations in the near term, as businesses cannot switch to new regions overnight. There must be market development work.

Moreover, other areas, such as China and India, also continue to present various limitations to South African agricultural products, including higher tariffs and phytosanitary barriers, despite recent pronouncements by China about their willingness to reduce tariffs on products from Africa. This suggests that the South African authorities and businesses will have to continue engaging with the U.S., while also exploring new markets for future diversification. However, this approach cannot be viewed as a replacement for the U.S., but rather as an extension of it.

The logistics at the ports have not been as challenging as they were in past years. The ongoing collaboration among Transnet, business, and government is helping to improve planning and operations, enabling better service to the sector. Still, we are far from achieving the desired efficiency, and the improvements will involve increasing investments.

Beyond the trade and harvest matters, biosecurity remains a challenge in South Africa. The foot-and-mouth disease continues to present increasing costs to businesses.

Listen to the podcast for more insights. Wandile Sihlobo website

Brazil is a major producer of coffee, accounting for nearly 40% of global coffee production. Other major producers are Vietnam 17%, Colombia 8%, Indonesia 6% and Ethiopia 6%, amongst others.

Brazil is also a major coffee exporter to the U.S. Consequently, the 50% tariffs that will take effect on August 1 will likely cause Americans headaches. Brazil's coffee is inescapable due to its significance in global coffee production.

Coffee prices have been relatively high since the start of the year due to unfavourable weather conditions in Vietnam and Brazil, which have weighed on global supplies. The U.S. tariffs will pose a challenge for American consumers.

We are watching the impact of all this on the global coffee prices, which have surged recently on the back of the U.S. tariffs and the preexisting challenges of unfavourable production conditions in South America.

As South Africa, we import coffee, and Brazil can surely have room to increase supplies to South Africa. I know our domestic tea and coffee producers won't like me saying this. But hey, we have a decent demand for coffee (just like we do with other "substantive beverages” like whiskies, where we spend over US$300 million on imports annually).

Anyways, if one looks at South Africa's coffee imports by volume, we imported, on average, about 23,921 tonnes per annum in the past five years. Brazil and Vietnam accounted for 54% of South Africa's coffee imports. Other suppliers of coffee to South Africa include Uganda (8% of SA's imports), Tanzania (7%), Colombia (4%), Guatemala (4%), Ethiopia (3%), and Honduras (3%).

So, if Brazil can offer competitively priced, high-quality products, it can take a market share from the likes of Vietnam and many African suppliers. The South African consumer is not asking for much – just high quality and a better price.

In these times of export diversification, while South Africa is a small importer, it certainly can take a few more tonnes of coffee imports from Brazil.

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Richard Humphries and Sam Mkokeli produce this podcast.

Wandile Sihlobo is the chief economist of the Agricultural Business Chamber of South Africa. Wandile Sihlobo website

The close observers of this letter will recall that when I first argued for South Africa to place temporary restrictions on the imports of poultry products from Brazil, the idea wasn’t for us to be protectionists. Instead, we wanted to ensure that Brazil controls the avian influenza outbreak before we could resume the imports. This decision was not unique to South Africa, but a standard global practice, and at the time, the EU and China had already placed temporary bans on Brazil’s poultry imports.

We also had haunting memories of the 2023 avian influenza in South Africa, which led to significant financial losses for poultry producers and higher prices for eggs and other poultry products for consumers. At the same time, we were seeing the perverse spread of the various strains of bird flu in the U.S. and parts of the UK, which had crossed from poultry to dairy, and then to humans. Having witnessed such cases, it only seemed fair to ensure that South Africa takes a careful approach to the imports.

After it was established that the ban was only in a few areas, South Africa started applying a regionalised poultry import restriction and opened some regions for imports. This was to ease the poultry supplies in the domestic market, while ensuring there were careful considerations for the potential spread of the disease. This was also on the back of the recognition of the importance of Brazil in South Africa’s poultry imports. South Africa imports roughly 20% of its poultry products, which is about 350,000 tonnes a year, and approximately 70% of those imports are from Brazil.

Having received convincing data on the successful containment and eradication of the disease, the South African authorities have sufficient confidence to lift the ban on Brazil’s poultry product imports. This was effective on July 4, 2025. With imports now back on a regular schedule, it is fair to assume that the fears of a meat price inflation uptick should subside. The resumption of imports bodes well for moderating food price inflation that we hold for the year. Wandile Sihlobo website

In the current world of trade fragmentation, one area the BRICS countries should consider focusing on more in their deliberations this year is deepening intra-BRICS trade. For South Africa's agriculture, this has been a central input in various discussions for some time, reflecting our desire to expand export markets to the BRICS countries, as well as the potential that lies in this region.

Currently, South African agricultural exports to the BRICS remain relatively low (at less than 10% of our agricultural exports to the world, which are US$13.7 billion as of 2024). The BRICS group is not a trade bloc, which partly explains our low agricultural penetration.

However, this may be an opportune time to change this reality and explore a more ambitious agricultural trade arrangement that aims to address the low intra-trade challenge in agriculture within this grouping.

What has proven to be a constraint in the past is not the low demand, but rather the relatively high import tariffs and some non-tariff barriers (phytosanitary barriers) within this group, which continue to distort agricultural trade.

The BRICS countries represent a substantial agricultural market, with annual imports exceeding US$300 billion.

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Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website