South Africa’s agricultural sector has been one of the few bright spots in the economy, posting brisk growth of more than 15% in the second quarter of 2020 when everything else imploded under the weight of the pandemic and associated lockdowns. Of course, farming was allowed to continue even under the hard lockdown and the weather has also been generally good. But the pandemic itself has given the sector a boost.
“Export volumes for Q2 increased by 33% for oranges, 43% for soft citrus and 44% for lemons and limes. Prices were also higher due to both local and international demand for Vitamin C in light of Covid-19,” it said in a recent research note. South Africa is the world’s No 2 exporter of citrus, behind Spain, and the economy can use all the foreign currency inflows that come with exports that it can get right now. As the central bank noted in its Monetary Policy Committee statement last Thursday, “South Africa’s terms of trade remain robust. Commodity export prices are high, while oil prices remain generally low.” Much of this stems from precious metals such as gold. The citrus sector is also playing a role here.
The long-range weather forecast remains favourable, with a La Nina event predicted to bring normal to above normal rain in the summer rainy regions. That also bodes well for the staple maize crop, which is expected to yield a bumper harvest of more than 15 million tonnes.
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