Agro weathers Omicron storm, tourism hit hard


Grape fields in South Africa

from DION HENRICK in Cape Town
CAPE TOWN, (CAJ News) UNLIKE tourism, South Africa’s agricultural sector is forecast to survive the effects of the travel restrictions imposed on countries in the region after the emergence of a new coronavirus variant.

On the agricultural side, only the wine industry remains a primary concern because of its links with tourism.

The Agricultural Business Chamber (Agbiz) believes there is a lot that remains unknown about the Omicron variant presently but it does not foresee it causing major changes in regulations and trading activity for much of the sector.

“After all, agriculture has largely been classified as an essential industry and has remained operational since the start of the pandemic,” Agbiz chief economist, Wandile Sihlobo, stated.

The agency, an influential association of agribusinesses operating in Southern Africa, nonetheless pledged to monitor the potential impact of the travel bans and the general surge of COVID-19 infections on global supply chains.

“This is an important area for South Africa’s export-orientated agricultural sector,” Sihlobo explained.

Aside from pandemic-related uncertainty, South Africa’s agricultural sector has started the 2021/2022 production season positively.

The country is experiencing the La Niña, marked by frequent and above-average rainfalls the country has received since the beginning of October.

Soil moisture has improved considerably across the country.

Farmers started planting in October in the eastern regions.

For some provinces the optimal planting window is usually between November 15 and the end of December.

South African farmers intend to plant 4,34 million hectares of summer grains and oilseeds.

This is a 5 percent increase from the 2020/2021 production area.

The current wave of La Niña, while favourable for the Southern African region, has brought dryness in some South American countries.

There have been reports of crop damage in areas that planted early in South America.

Sihlobo noted the dryness could negatively affect global grain and oilseed supplies, and result in prolonged bullish global prices.

Such price trends, combined with possibly higher yields in South Africa, are projected to be beneficial to farmer finances.

“In sum, while SA’s tourism industry and associated businesses such as wine will be negatively affected by the reduction in travel and visitors going into the festive season, the broader agricultural sector is likely to remain robust going into 2022,” Sihlobo stated.

Besides foreign currency generation, agriculture is a major employer in South Africa.

The Quarterly Labour Force Survey data released by Statistics South Africa last week showed that in the third quarter of 2021, agricultural employment increased by 3 percent year-on-year to 829 000.

This is well above the long-term agricultural employment of 780 000.

The agricultural economy is solid for a second consecutive year.

In 2020, the sector’s gross value added expanded by 13,4 percent yearly.

The Bureau for Food and Agricultural Policy forecasting a 7,6 percent annual growth this year.

– CAJ News








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