Excessive rainfall threatens agricultural output in Southern Africa

The agricultural sector in South Africa is bracing for uncertainty as excessive rainfall threatens to impact harvests and prices in the coming months. The sector had initially seen a promising start to the season with widespread rainfall across the region, leading to an increase in planting areas. Countries like Zimbabwe, Zambia, and Malawi were all expected to have a successful season, with South Africa projected to have its second-largest harvest. However, recent events, including a cyclone in Mozambique and excessive rainfall in South Africa, have introduced risks to the outlook. The Chief Economist at the Agricultural Business Chamber of South Africa, Wandile Sihlobo, discussed these challenges in a recent interview on CNBC Africa. One of the key concerns raised in the interview was the impact of rising agricultural prices, particularly for maize. Despite expectations of a decrease in prices due to a larger harvest, prices have remained elevated, driven by solid demand from China. The recent rainfall has further added to the uncertainty around pricing levels, with potential risks of prices remaining high for a longer period, leading to concerns about inflation. While the excessive rainfall has raised fears of damage to crops and potential disruptions to production, Sihlobo emphasized that the current forecasts for agricultural production in South Africa remain stable. The outlook for Zimbabwe and Malawi, however, posed more uncertainty, with concerns about the impact of the weather on harvests in those regions. Sihlobo also highlighted the challenges faced by the wine sector in South Africa, noting the impact of the alcohol ban on sales and exports, which has left significant inventories of wine sitting idle. Despite the challenges, Sihlobo remained cautiously optimistic about the contribution of agriculture to the GDP for the first quarter of 2021. While the sector had shown resilience in 2020, with a projected growth of between 10% and 13%, the outlook for 2021 was more modest, with growth expected to be around 2.5%. The uncertainties surrounding the weather, pricing, and the impact of government policies on the sector have added layers of complexity to South Africa's agricultural landscape. As the agricultural sector navigates the challenges posed by excessive rainfall and shifting market dynamics, stakeholders will need to closely monitor developments and adapt to changing conditions. The resilience of the industry, coupled with strategic planning and policy interventions, will be crucial in ensuring the long-term sustainability and growth of South Africa's agricultural economy.