URSUS- Main 2


Agriculture Investment

  • Verbruikers sal na verwagting toenemend armer word aangesien Suid-Afrika se ekonomie steeds teen ‘n lae tempo groei, terwyl  erbruikersprysinflasie verhoog . 

  • The household expenditure for consumers increased and this support the market for domestic agricultural products. Equally important for primary producers is the fact that the secondary industrial sector’s growth increased by 4,5% in the third quarter.

  • The total poultry imports from Brazil are estimated at R3,2 billion for 2017. During the first 10 months of 2018 Brazilian imports already exceeded R2,9 billion.

    The expected imports for 2018 can be estimated at R3,6 billion. From the world, South Africa imported until October an estimated R5,14 billion broiler meat products. The total imports from the world for 2018 are estimated at R6,2 billion. Keep in mind that the average exchange rate for the Rand to the $ were R13.32 in 2017 and R13.16 in 2018. The import value of poultry products increased by 20% year on year. The profitability of local poultry production is challenged by the increased competitive imports from the world. South African exports of poultry declined year on year by 16,3%. The impact of imports on the poultry industry and the consequent substitution of local production impacts also on other industries such as the grain and oilseeds industry. Growth in the domestic market for locally produced feedstock such as maize and soybean are impacted negatively as well.


    South African poultry imports increased by 20% year on year. The value of poultry imports is estimated at R6,2 billion for 2018. The Poultry Association applied for an adjustment in the import tariff to protect the local industry from cheaper imports.


    The combination of the unusual increase in supply by primary producers of cattle to meet cash flow needs and the seasonal increase of supply by feedlots at abattoirs to meet demand during the festive season weigh on local beef prices.

    The tightening supply in Australia and a strong export demand will support mutton prices in 2019

    At current prices US pork producers will be producing pork at break-even levels during Q1 in 2019. Producers will incur losses with further declines in pork prices.

    ABSA AGRI TRENDS- Wessel Lemmer. 

  • In the past 5 years, volatile weather conditions have kept the South African producers on their “knees”. Through these trying times they’ve always remained resilient. Another dry and trying season.

  • As a result of maize prices increasing to import parity price levels and carcass prices declining due to the suspension of beef exports as a result of SA’s loss of its free Foot-and-mouth disease status, feedlots are near break-even cost levels.

  • The suspension of beef exports and the poor outlook of summer crops which will subsequently affect the feed industry were the main drivers of the decline in prices in the beef industry.

  • Just as prices for staples such as maize meal start to decline and lower income consumers start to enjoy the benefits of the current old season maize surplus at export price levels the current drought may change the outlook for 2019.

  • The decrease in the total gross producer value (GPV) of maize for 2019 will be limited by increased maize prices. Due to the severe drought in 2016 the increased price levels maintained the gross producer value of production. It is thus expected to be the case in 2019 as well.

  • Underneath is an interpreted summary of the aspects covered in the SONA on agriculture. (Full SONA attached in MSWord). It will be interesting to see how the national budget on the 20th February will allocate funds in support of the vision set out in the SONA. The importance of agriculture was highlighted a couple of times.

  • Significant rains were received during the first two weeks of February 2019 covering most of the summer rainfall areas. However follow up rains in the next two weeks is critical to ensure sufficient soil moisture to assist crop development and minimize crop damage until the end of season.


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