JOHANNESBURG - The Agricultural Business Chamber of South Africa, in partnership with the IDC, says confidence in the agricultural sector is improving.
Its Confidence Index rose by eight points to 53 in the third quarter of this year.
But while this year’s bumper grain harvest has helped ease food inflation, concerns are growing about the next planting season and the potential impact of El Niño.
READ: El Niño could spell trouble for farmers and food prices
The weather phenomenon typically brings hotter and drier conditions to Southern Africa.
The period from October is expected to be hotter and drier than usual, coinciding with the start of the planting season.
Agbiz says South Africa is better positioned to weather the drought than during previous dry spells, thanks to later rains this year and surplus grain stocks.
But it warns that food prices are still likely to rise.
Wandile Sihlobo says food inflation could average just under 3% this year, but may rise to around 5% next year.
He says while food prices are not expected to rise to crisis levels, even small increases could put further pressure on already struggling households.
And with the weather expected to complicate matters, South African households could face even tougher conditions in 2027.