Sentiment in South Africa’s agriculture industry surged to a new high in the second quarter, supported by expectations of record crop yields and strong commodity prices.
An agribusiness confidence index compiled by the Agricultural Business Chamber of South Africa climbed to 75 from 64 in the first quarter, the group said Monday in an emailed statement. That’s the highest level since the gauge was started in 2001.
Favorable weather conditions that allowed farmers to plant on time and increase area plantings for crops, as well as higher commodity prices that bolstered farmers’ finances, contributed to better sentiment, the business group said.
“Our main concern at the moment is around the biosecurity challenges in the livestock and poultry sectors,” said Wandile Sihlobo, chief economist at the business chamber. “These are areas that should be addressed to sustain the positive momentum in agriculture,” he said. South Africa is suffering from outbreaks of avian influenza and foot-and-mouth disease.
Agriculture contributes 3% to gross domestic product, according to statistics agency data. The group sees agricultural output expanding 5% in 2021.