South Africa’s agribusiness confidence index rose eight points to 53 in the third quarter, although respondents remained concerned about drought, input costs, export access and logistics.
The Agbiz/IDC Agribusiness Confidence Index (ACI) rose by eight points from the second quarter of 2026 to 53 in the third quarter, moving above the 50-point neutral level for the first time this year.
Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa (Agbiz), said the latest reading indicated that agribusinesses were optimistic about business conditions.
“The optimism this quarter was primarily among respondents in the financial services sector, grain traders, input suppliers and the feed industry,” he said.
Other respondents maintained their views from the previous quarter. However, survey participants raised concerns about a possible El Niño-related drought during the 2026–27 season, geopolitical tensions, higher input costs and trade disruptions.
Some respondents also expressed concern about the slow process of opening additional export markets to support the long-term growth of agriculture.
The survey was conducted during the first week of September 2026 among businesses across agricultural subsectors nationwide. The ACI comprises 10 sub-indices.
Confidence moves above neutral
The market-share sub-index rose by six points to 67 in the third quarter. Sihlobo said the improvement reflected strong harvests in horticulture and field crops, as well as generally better export performance during the year.
The capital-investment sub-index rose by 29 points from the second quarter to 63. Sihlobo described the increase as surprising because high-frequency data showed that tractor and combine-harvester sales remained weak.
“Farmers are anticipating a challenging drought season in the 2026–27 production year,” he said.
The export-volume sub-index increased by 21 points to 58. Sihlobo said this was consistent with strong agricultural exports.
In the first half of 2026, South Africa’s agricultural exports amounted to $7.8 billion (R124bn), up 11% from the same period in 2025.
The general-economic-conditions sub-index rose by 10 points to 38, although it remained below the neutral level.
Turnover remains stable
The turnover sub-index was unchanged at 67. Sihlobo said favourable levels were supported mainly by strong harvests of grains, oilseeds, fruit and vegetables.
The net-operating-income sub-index also remained unchanged, at 50.
Employment and conditions weaken
Sihlobo said this was consistent with data showing a slight decline in agricultural employment since the start of the year. Statistics South Africa’s Quarterly Labour Force Survey for the second quarter of 2026 recorded 944,000 people employed in the farming sector, down 2% quarter-on-quarter but up 4% year-on-year.
The general-agricultural-conditions sub-index fell by 25 points to 36. Sihlobo attributed the decline mainly to expectations of an El Niño-related drought and its possible effect on production during the 2026–27 season.
The debtor-provision-for-bad-debts and financing-cost sub-indices are interpreted differently from the other measures. A decline is viewed as favourable, while an increase indicates greater financial pressure.
In the third quarter, the debtor-provision-for-bad-debts sub-index increased by 13 points to 46. This reflected expectations of more difficult financial conditions because of higher input costs, animal diseases and drought concerns.
The financing-cost sub-index rose by 42 points to 58, indicating expectations of higher future financing costs and interest rates.
Outlook remains uncertain
Sihlobo said the results reflected a favourable agricultural season that was drawing to a close.
“Going forward, there remains uncertainty. The likely El Niño drought, higher input costs, lingering foot-and-mouth disease in the cattle industry, port inefficiencies and the need to open new export markets remain the primary focus for many agricultural and agribusiness stakeholders,” he said.
“Geopolitical tensions also continue to pose risks, including higher farm-input and shipping costs. These geopolitical tensions do not bode well for South Africa’s efforts to open more export markets, all of which are essential for the long-term growth of the agricultural sector,” he said.
Yogashen.pillay@nationalmg.co.za