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An impressive rebound in agriculture GDP in the fourth quarter of 2021

09 March 2022 Paul Makube, Senior Agricultural Economist at FNB

Statistic South Africa’s latest update on the country’s agriculture real GDP for 4Q21 shows an impressive rebound of 12.2% quarter-on-quarter (q/q) seasonally adjusted after surprising on the downside by 1.5% q/q in the 3rdQ21. The country’s overall real GDP grew by 1.2% in the 4thQ21 underpinned by gains in trade (+2.9%q/q), manufacturing (+2.8%q/q), personal services (+2.7%q/q), and agriculture.

The upbeat outcomes for agriculture were not surprising given the already positive indications of good seasonal rains that boosted activity with heavy lifting in the wheat harvest which rose by 6% year on year to a record high of 2.26 million tons amid strong prices averaging R5941/ ton (up 6.6% q/q and 19.5% y/y). The animal product category also came to the party, making an immense contribution to the agriculture GDP outcomes on the back of higher livestock slaughtering’s, robust domestic demand, and strong meat prices. Livestock slaughtering increased sharply by 17% q/q in 4thQ21 which increased the availability of animal products for the local markets and exports.

On international trade, 4th quarter export revenues for agriculture, food, and beverages rose 18% y/y to US$2.8 billion which brought the overall 2021 earnings to a record high of US$12.4 billion. This was underpinned by the increased availability of exportable product, robust external demand, and higher commodity prices in a challenging international market that is yet to recover fully from the Covid-19 scourge. The increased collaboration by agricultural industry players, Transnet, and logistics companies played a pivotal role in ensuring limited hurdles to the movement of produce destined for various markets across the globe.

Although a marginally lower summer crop harvest is expected according to the Crop Estimates Committee’s 1st forecast for 2022, the generally strong commodity prices, strong demand, and higher horticulture output on the back of excellent seasonal conditions should help sustain the current sector performance in 2022.

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