Confidence in South Africa’s agricultural sector rose sharply in the third quarter, but the prospect of hotter and drier El Niño conditions is weighing on the next planting season.
The Agricultural Business Chamber of South Africa’s confidence index, compiled with the Industrial Development Corporation, increased by eight points to 53.
A reading above 50 indicates that respondents are more optimistic than pessimistic about business conditions. The increase follows a strong grain harvest which has helped to ease food-price pressure this year.
Agbiz chief economist Wandile Sihlobo told eNCA that South Africa was better placed to cope with a dry period than during previous droughts because of later rains and surplus grain stocks.
The outlook remains uncertain. El Niño conditions typically bring hotter and drier weather to Southern Africa, and forecasts cited in the report point to above-normal heat and reduced rainfall from October, when summer-crop planting begins.
Sihlobo estimated that food inflation could average just under 3% in 2026 before rising to about 5% next year. Those figures are forecasts, not confirmed price outcomes, and will depend on weather, harvests, input costs and broader market conditions.
Agbiz did not describe the expected pressure as a food-price crisis, but said even modest increases would affect households already facing tight budgets.
