Climate change impact on agricultural commodities

South Africa's agricultural sector is gearing up for a positive outlook in 2024, despite facing various challenges such as load shedding, avian influenza, foot and mouth disease, and biosecurity issues. In a recent roundtable discussion at Netbank, industry experts, including Zhann Meyer, Head of Agricultural Commodities, came together to analyze the sector's forecast and the potential impact of climate change. The consensus among farmers and experts is that El Nino will not be as severe as anticipated, with nearly 100% of previous year's maize hectares already planted, indicating food security stability for South Africa's summer crop regions. Despite these positive signs, the industry remains vigilant about climate risks, particularly the frequency of extreme weather events which have been increasing in recent years. Commercial farmers have shown resilience in dealing with challenges through mechanization, technology adoption, and remote sensing techniques to mitigate risks. With food inflation on a downward trend and input costs stabilizing, farmers are poised for a relatively good year, provided productivity and yield levels remain high. In terms of big ticket commodities, white and yellow maize, beef, citrus, and palm fruit are identified as sectors with high export potential and promising returns. The maize sectors have seen continuous growth due to technology adoption, economies of scale, and advancements in seed development. South Africa's net export of maize to neighboring African countries and Europe highlights the sector's strong performance. The beef industry has gained momentum with market access to China and Saudi Arabia, showcasing South Africa's reputation for high-quality halal meat. Despite logistical challenges and biosecurity concerns, the citrus export industry remains resilient, exporting over 160 million cartons of citrus last year. The palm fruit, apples, and pears sectors are also showing early export potential, with farmers adapting to rerouting strategies to navigate challenges effectively. Overall, the agriculture sector's export revenue is expected to increase by 2% this year, reaching $12.8 billion. The industry's ability to adapt to challenges and explore new opportunities for growth underscores its resilience and potential for a successful year ahead.