AGRICULTURE
WANDILE SIHLOBO: Drought and declining confidence weigh on farmers
Although the agricultural sector emerged as an anchor of SA’s economy in 2017’s second quarter, growing 33.6% quarter on quarter, things are not all rosy due to persistent dryness in the Western Cape and a decline in agribusinesses confidence. After dropping one index point in the second quarter, the Agbiz/IDC agribusiness confidence index declined by two more points in the third, to 54 points. A reading above 50 indicates expansion in agribusiness activity, which means conditions were still fairly favourable in the third quarter of the year, but on a declining trend. It remains unclear whether confidence could be revitalised in the short term, given the nature of the key drivers of the recent decline. These were the unfavourable weather conditions in the Western Cape and slow white maize export activity. Just last week, the South African Weather Services indicated that the country’s southwestern parts could remain dry and warm for the foreseeable future.
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