South Africa’s agribusiness sector has seen a slight dip in sentiment, with the Agbiz/IDC Agribusiness Confidence Index (ACI) falling from 65 in the second quarter (Q2) of 2025 to 63 in Q3. While this marks the second consecutive quarterly decline, confidence levels remain well above the 2022–2024 average, reflecting the sector’s resilience.
The index had surged to 70 in Q1 2025, driven by renewed optimism, before moderating in the past two quarters.
Key Drivers Behind the Decline
According to Dawie Maree, head of agriculture marketing and information at FNB, the recent dip was largely influenced by uncertainty over new US tariffs on agricultural products and the ongoing foot-and-mouth disease (FMD) outbreak.
“The US tariff is a problem, but not as big as initially feared, with producers already taking steps to manage it,” Maree noted. He added that both challenges are expected to ease as the FMD vaccine rollout gains momentum and tariff impacts become clearer.
Despite the decline, Maree stressed that sentiment remained stronger than in recent years, supported by:
- Political stability under the Government of National Unity,
- Improved service delivery at ports,
- Over 100 days without load-shedding,
- Lower interest rates, and
- Favourable rainfall conditions.
Subindex Performance
The ACI is composed of 10 subindices, five of which declined in Q3:
- Market share confidence: down six points to 59.
- Employment confidence: down five points to 50, reflecting a 3% drop in farm jobs to 906,000 in Q2.
- Capital investment confidence: down eight points to 67, despite strong tractor and combine harvester sales.
- Export volumes: down sharply by 17 points to 43, amid trade concerns. However, actual export data tells a brighter story — exports rose 10% year-on-year to US$3.71 billion (approx. R70 billion) in Q2.
- General agricultural conditions: down 13 points to 67, as livestock producers faced biosecurity pressures.
On the upside:
- Turnover confidence jumped 20 points to 75.
- Net operating income rose six points to 71.
- Financing costs sentiment improved, with the index down 14 points to 71, reflecting easing interest rates.
- Debtor provision for bad debt held steady at 50.
Outlook: Uneven Recovery Ahead
Wandile Sihlobo, chief economist at Agbiz, said the results highlight an uneven recovery in 2025, with livestock producers in particular facing continued strain.
He emphasised that South Africa’s heavy reliance on exports makes the sector vulnerable to geopolitical shocks and tariff shifts. “BRICS countries, particularly China, India and Saudi Arabia, offer major opportunities, but we must also maintain strong links with existing markets in the EU, UK, Africa, Asia, Middle East and Americas,” he told Farmer’s Weekly.
Sihlobo added that stronger business–government partnerships are critical for sustaining growth. Key priorities include:
- Tackling biosecurity risks,
- Improving municipal service delivery, and
- Ensuring effective allocation of state land.
Bottom Line
While sentiment has softened slightly, the agriculture sector remains on firmer ground compared to previous years. The current mix of stable politics, favourable weather, easing interest rates, and resilient export growth provides a strong base — even as biosecurity threats and tariff uncertainty temper optimism.
