However, the overall growth was driven by a bumper fruit harvest and a notable recovery in livestock exports, which saw a 3% increase, attributed to both higher volumes and better prices for certain products.

Paul Makube, Senior Agricultural Economist at First National Bank explained that the surge in exports was largely down to the strong demand for SA produce across the African continent and in European markets. "We saw our share of the African market increase from 39% to 44% in the third quarter. This growth is mainly attributed to increased exports of maize, wheat, and other grain products, especially as Southern Africa struggled with its own grain production due to the drought," he said.

While grain production did suffer a significant blow, with a 22% drop in output for summer crops, Makube noted that farmers were quick to adapt. This not only resulted in a rise in prices but also affected downstream industries, especially the livestock sector, where feed costs rose sharply, putting pressure on profit margins.

Another ongoing challenge for SA's agricultural exports is logistical issues, particularly concerning ports and rail infrastructure. Makube noted that while there has been some progress, there is still a long way to go. "Over the years, we've seen some improvements in port operations, particularly during the peak citrus export season. However, the poor state of road infrastructure and rail logistics continues to make it difficult to get products to market on time," he explained.

Looking ahead to 2025, the outlook for the agricultural sector remains cautiously optimistic. "With more favourable weather conditions this year, we expect a slight recovery in agricultural output, particularly for summer grains and horticultural crops. This, combined with strong export activity, should help maintain growth," Makube said. However, he acknowledged that geopolitical challenges, such as tariffs and trade tensions, could still pose uncertainties for the sector.

Price trends are another important factor to consider. Makube observed that prices for South African agricultural products remained strong in 2024, thanks to a slight recovery in the global economy. He anticipates this trend will continue into 2025, supporting the country’s export prospects. "With global economic conditions improving, and demand for SA produce remaining stable, we expect prices to hold steady," he stated.

Government policies and international trade agreements play a vital role in the sector’s success. Makube stressed the importance of maintaining strong trade relations both within Africa and with international markets. "SA exports over 60% of its agricultural produce, so maintaining these relationships is crucial. Additionally, opening new markets, as outlined in the country's agricultural master plans, is essential for continued growth," he noted.

As climate change continues to disrupt agricultural productivity, Makube highlighted that while farmers are adopting climate-resilient technologies, the cost of implementing such practices remains a significant challenge. "Farmers are increasingly turning to drought-tolerant crops and other sustainable practices to cope with shifting weather patterns. However, these solutions come at a cost, and the challenge remains to ensure that farmers are supported through this transition," he said.

The African Continental Free Trade Area is also starting to show positive results, with SA agricultural exports to the continent rising. Makube observed that intra-Africa trade is growing, which could help reduce the continent's reliance on imports from outside Africa. "As logistics improve and infrastructure investments continue, we expect this trend to continue. Africa must reduce its dependence on imports from regions like North America and Europe," he said.

However, political challenges, such as trade disruptions with the United States (US), remain a potential risk. "If trade barriers increase, especially with key markets like the US, the impact could be significant, particularly for sectors like citrus exports. Losing any market is always concerning, but we remain hopeful for diplomatic solutions that can preserve these vital trade relationships," Makube explained.

Looking to the future, Makube is cautiously optimistic about the agricultural sector’s prospects for 2025. "Despite challenges like the drought and fluctuating global conditions, we expect a good crop yield and strong export performance. The transition from El Niño to La Niña has brought more rain, which should benefit crop production. We remain cautiously optimistic for another successful year," he said.

For local farmers and agribusinesses looking to expand into export markets, Makube advised that collaboration with industry bodies and government departments is key. "It’s important for farmers to plan strategically and engage with commodity organisations and agricultural business chambers. As the agricultural master plan suggests, unlocking new markets and improving trade relations will be essential for long-term growth," he concluded.

--ChannelAfrica--