Following a marginal improvement in the Agbiz/IDC Agribusiness Confidence Index to 46 in the first quarter of this year, sentiment fell back in the second quarter to 44. A level below the neutral 50-point mark implies that agribusinesses are still downbeat about business conditions in South Africa. The survey was conducted between 27 May and 6 June 2019 and comprised agribusinesses operating in all agricultural subsectors across South Africa. Please click here to peruse the full media statement.  Agbiz CEO Dr John Purchase discussed the confidence levels in the agricultural sector in the second quarter in the linked interview on RSG.  

We are currently witnessing the impact of climate change on the agricultural sector, both on the local and global fronts. These effects will probably intensify in future. Last week, Stats SA presented a gloomier-than-expected picture of the South African agricultural economy, which contracted on a quarter-on-quarter basis by a seasonally adjusted and annualised rate of 13.2%. As tempting as it was for some among us to attribute this to a decline in agricultural investment due to policy uncertainty, this was not the case, states Agbiz chief economist Wandile Sihlobo in the linked article written for and first published in Business Day.

This has not been a good year for South Africa's agricultural machinery market. Tractor and combine harvester sales have been subdued since January. Nevertheless, this is unsurprising owing to a combination of factors. First, there were robust sales in 2018, which implies that the rate of replacement will likely be down this year. Second, the reduction in summer grains and oilseeds plantings due to unfavourable weather conditions have also contributed to the poor agricultural machinery sales this year as it weighs on farmers' finances. Lastly, the relatively weaker domestic currency to the US dollar might have also influenced the farmers purchasing decisions. Wandile Sihlobo elaborates in the linked article.