Second-Quarter Agri Expansion Could Be Somewhat Milder

South Africa’s agriculture sector had a solid start to the year, with first-quarter gross value-added figures growing 27,8% quarter-on-quarter (q/q) on a seasonally adjusted and annualised basis.

- Wandile Sihlobo

I previously noted that the succeeding quarters would likely continue to show strong growth, which is a view I still maintain. But the second-quarter expansion could be somewhat milder than the first quarter, possibly in the range of 20% to 25% q/q on a seasonally adjusted and annualised basis. The key drivers will remain somewhat similar to the previous quarter, which saw an uptick in animal products, field crops and horticulture.

Within field crops, sugar was the main driver, while in horticulture, deciduous fruits were the primary drivers of the bounce-back in the first quarter. In the second quarter, however, summer grains and oilseeds will likely be the key drivers of growth as harvest processes and deliveries start gaining momentum, as well as into the third quarter. The season was delayed due to dry conditions at the start of the period.