Article

• Confidence in South Africa’s farming and agribusiness sector has weakened, according to our latest quarterly survey. The Agbiz/IDC Agribusiness Confidence Index, a sentiment indicator in the sector, fell by 18 points in the first quarter of 2026 to 49. A level below the 50-neutral mark typically indicates pessimism. The change in sentiment from the upbeat tone we started the year with is justifiable. Less than a quarter into the year, there are worsening domestic and global challenges that will weigh on the sector’s performance and will be top-of-mind for agribusinesses.

• On the domestic side, the ongoing challenge of animal diseases, mainly foot-and-mouth disease (FMD) in cattle and African swine fever in the pig industry, is a key concern. Vaccination is gaining momentum in the cattle industry. Still, the challenge of securing supplies at the start of the year had a significant impact on the dairy industry in KwaZulu-Natal and value chains in the beef industry in other provinces, such as the Free State, Gauteng, and North West. We now have the disease across the country in all provinces, so farmers are in a hurry to obtain vaccines to cushion their cattle herds.

• We have also observed devastating cases of spread in communal areas, where vaccination has also been inadequate. As the FMD spreads, the pig industry faces a similar challenge with the re-emergence of African swine fever. There is no vaccine against African swine fever. South Africa, along with countries like China, has in the past struggled with African swine fever, leading to notable financial losses in the industry. It remains difficult to assess what the financial impact is at the moment. It is critical that the disease is contained before it spreads widely in communities, as that would open another wave of an outbreak amongst informal pig farmers. This also calls for commitment of resources to the pig industry in addition to the constrained resources already devoted to the cattle industry.

• Outside of the livestock sector, the wheat and sugar industries in South Africa have faced the challenge of exposure to ample global supplies. The South African agricultural sector is interlinked with the world market, and commodity prices tend to follow what we observe globally. At the moment, the world is experiencing a record wheat harvest, and South African farmers are having to contend with these global developments. For example, the International Grains Council forecasts 2025-26 global wheat production at a record 842 million tonnes, up 5% year-on-year. This is on the back of ample harvests in the EU, Russia, the U.S., Canada, Australia, Argentina, Ukraine, and Kazakhstan, amongst others.

• It is partly these ample global supplies and lower global wheat prices that have led to calls for an increase in the domestic wheat import tariff. The wheat import tariff exists to provide some level of protection for domestic wheat producers while ensuring that consumer welfare is not sacrificed. The key is to find some level of balance. South Africa will likely have to import around 1.85 million tonnes of wheat for the current marketing year (which ends in September) the same as the previous season. We initially expected imports to be lower, but the recent downward revisions to domestic production may necessitate an increase in import volumes above our initial estimate of 1.75 million tonnes.

• The sugar industry partly faces the challenge of ample global supplies, which is driving down prices. For example, the Food and Agriculture Organisation of the United Nations (FAO) saw its global Sugar Price Index average 86.2 points in February 2026, down 27% from a year ago. In fact, the global Sugar Price Index is at its lowest level since October 2020. South African farmers are experiencing the effects of these supplies, in addition to domestic industry issues that also weigh on sentiment in the industry.

• The difficulties in the Port of Cape Town during the table grape and other fruit export period from November 2025 through to February 2026 were another major domestic development that has added to the dampened mood in the farming sector.

• As all these domestic matters evolve, the conflict in the Middle East is increasingly a concern for various stakeholders in the sector. South Africa’s agriculture is exposed through exports of agricultural products and, from an import perspective, mainly fuel and fertilisers. We are now approaching a busy period of harvesting in the citrus and summer grains sectors from May 2026, which is a high-fuel-consumption period. We are also starting to plant winter crops around the same time. Therefore, higher fuel prices, combined with higher fertiliser prices, will constrain farmers’ finances. In the case of exports, rising shipping costs and disruptions to shipping routes will weigh on shipments to the Middle East and some Asian markets. These are key regions that typically account for around 20% of South Africa’s agricultural exports, valued at US$15.1 billion in 2025, according to data from Trade Map.

• Therefore, the weaker sentiment in the farming sectors must be framed from the perspective of these challenges. One must also understand that while these factors are shaping sentiment, this does not imply that all subsectors are under pressure. The field crops for the 2025-26 season are in good production condition, along with various fruit, vegetable, wool, and wine harvests, amongst other value chains. These should support the sector’s performance in 2026. Still, until we improve our management of challenges on the domestic side, the sentiment may remain subdued in the sector for some time.