Agricultural Market Viewpoint with Wandile Sihlobo

South Africa indeed transports much of its agriculture and food products by road. For example, 80% of South African staple grain products are transported by road. We see similar volumes in other commodities.

Agricultural products are also processed in certain regions and then transported to various consumption points. This means that fuel price changes affect food prices through adjustments in distribution costs.

Still, such fuel price changes in some products take a while to be passed through. Therefore, any sudden worry or urge to adjust prices is something to watch closely.

There is still a lot we don’t know about this Middle Eastern war, including how long it will last. Indeed, all indications point to a potential notable increase in fuel prices this coming month.

Still, it is probably fair to assume that we won’t see a sudden jump in most food products, as there are various adjustments the many role-players have to make and time lags.

I typically don’t encourage unnecessary close monitoring of food price adjustments, but if we continue to see such headlines, it may be useful to pay attention to these things. We are already seeing worrying price increases in farm inputs in some regions of our country. Wandile Sihlobo website

South Africa may miss its maize export forecast of 2.4 million tonnes for the 2025-26 marketing year, which ends in April. The exports so far are at 1.7 million tonnes as of the first week of March 2026. Given a softer weekly export pace, it is unlikely that the country will see strong enough momentum in the remaining weeks of the current marketing year to reach the 2.4 million tonnes seasonal forecast for maize exports. The challenge is the softer global demand, not supply availability. I discuss this issue further in the podcast and its implications for the sector and maize users.

Listen to the podcast for more. Wandile Sihlobo website

A day after we received robust agricultural GDP data, showing that the sector’s gross value added grew by 17.4% year-on-year in 2025, following a -8.4% year-on-year contraction in 2024, some may wonder why the sentiment indicators suggest a subdued mood.

In data released on March 11, we learned that after rising for much of last year, the Agbiz/IDC Agribusiness Confidence Index (ACI) fell by 18 points in Q1 2026 to 49, the lowest level since Q3 2024. The current ACI level of 49 is just under the 50-neutral mark, suggesting that South African agribusinesses are becoming somewhat pessimistic about business conditions in the country.

But this story requires some context; we provide it in this podcast. Wandile Sihlobo website

We are watching the worrying developments in the Middle East. The region is key to South Africa's agriculture, both for exports and for its influence on oil and gas prices.

Listen to the podcast for our early impression. Wandile Sihlobo website

We are in another favourable agricultural season in South Africa, with favourable rains that enabled the farmers to plant and supported the grazing veld for the livestock industry. This builds on a better agricultural performance in 2025, a year of La Niña rains that supported the sector. The only significant risk at the moment is foot-and-mouth disease, which continues to weigh on South Africa’s cattle industry. The Department of Agriculture is undertaking a nationwide vaccination campaign against foot-and-mouth disease, and the success of this process remains vital to the sustainability of the sector.

Listen to the podcast for more information.

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

After falling for two consecutive quarters, the Agbiz/IDC Agribusiness Confidence Index (ACI) increased by 5 points to 67 in Q4 2025.

Favourable weather conditions, strong exports throughout the year on the back of ample grains, oilseeds, and horticulture harvests, as well as better port efficiencies, are among the key drivers of optimism in the sector.

We suspect that the announcement of nationwide vaccination of cattle against foot-and-mouth disease also contributed to the upbeat mood, as the disease is a national challenge that, for some time, seemed out of control.

The current ACI level of 67 is well above the 50-neutral mark, suggesting that South African agribusinesses are generally optimistic about business conditions in the country. This survey was conducted in the last week of November and covered agribusinesses operating across various agricultural subsectors nationwide.

Listen to the full podcast for more information. Wandile Sihlobo website

We continue to receive encouraging notes about the prospects of La Niña in the 2025-26 summer season. The La Niña-induced rains will help support field crops, horticulture, and grazing veld for livestock. The farmers are optimistic and plan to increase area plantings, primarily of field crops.

One aspect of the agricultural sector that has posed a significant challenge is the livestock industry, which struggles with foot-and-mouth disease. But South Africa is embarking on vaccination nationwide. This will be a considerable undertaking to vaccinate over 12 million cattle (about 7.2 million are in the commercial herd).

The better weather outlook, combined with the vaccination campaign, provides us optimism that we may transition from a “mixed recovery” in 2025 to a “better recovery” in 2026. We remain optimistic.

Listen to the podcast more. Wandile Sihlobo website

About 720 million people continued to experience hunger in 2024, and 2.6 billion people were unable to afford healthy diets. It is this reality that compelled the G20 Leaders' Declaration in Johannesburg to shine a spotlight on global food insecurity challenges correctly. Countries can explore many interventions to resolve this challenge, from improving agricultural productivity to easing trade.

Listen to the podcast. Wandile Sihlobo website

Various regions of South Africa have started receiving the 2025-26 summer rains. The rains will help ensure that the agricultural season begins on time and that we have excellent production conditions. The farmers are relatively optimistic, having suggested that they intend to plant 4.5 million hectares of summer grains and oilseeds, a 1% increase from the 2024-25 season. Importantly, the favourable rains also help improve the grazing veld for livestock, and are beneficial to the horticulture industry. Listen to the podcast for more. Wandile Sihlobo website

The U.S. decision to modify its reciprocal tariffs and exempt some food products is a positive step towards easing agricultural trade friction, which is costly to both exporting countries and U.S. consumers. The exempted products include coffee and tea, fruit juices, cocoa, and spices, as well as avocados, bananas, coconuts, guavas, limes, oranges, mangoes, plantains, pineapples, various peppers and tomatoes, beef, and additional fertilisers. The U.S. government took this positive policy step in an effort to cushion U.S. consumers against higher prices resulting from the tariffs. In a way, this is a recognition that tariffs are a tax on consumers in importing countries, while also weighing on exporters. In our understanding, these products will no longer be covered under the Liberation Day Tariff levels, making access to the U.S. market much easier for various exporters.

South Africa is an exporter of various agricultural products to the U.S., including citrus products, table grapes, macadamia nuts, wine, ostrich products, and ice cream, among others. It appears that oranges, macadamia nuts and fruit juices will benefit from the exemption.[1] The U.S. accounts for approximately 4% of South Africa’s agricultural exports, valued at U.S.$13.7 billion in 2024.

In the second quarter of 2025, South African agricultural exporters took advantage of the temporary tariff pause and front-loaded their products. This resulted in a 26% year-over-year increase in South Africa’s agricultural exports to the U.S. in the second quarter, reaching U.S.$161 million. There remain concerns that going forward, the higher tariffs will weigh on agricultural product exports, particularly those not covered in these modified rates, such as table grapes, macadamia nuts, and wine, among others. South Africa is entering the table grape export season, and access to the U.S. market remains a challenge due to higher tariffs compared to South African competitors. Wandile Sihlobo website