Agriculture grows 0.3% as SA’s GDP contracts in Q2
South Africa’s gross domestic product (GDP) decreased by 0.2% in the second quarter of 2026, while the agriculture sector recorded modest growth, with experts highlighting its resilience.
Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa (Agbiz), said the farming economy remained on a growth path, although the second-quarter increase was more modest than expected.
“Agricultural gross value added expanded by 0.3% quarter on quarter, seasonally adjusted, down from a revised 1.2% in the first quarter,” Sihlobo said.
He said the season for most field crops had been delayed by about six weeks, which shifted harvesting and deliveries into the third quarter. Fruit harvesting had also been delayed, he added, potentially affecting the sector’s performance in the third quarter.
South Africa is also continuing to deal with foot-and-mouth disease in the cattle industry, although the vaccination programme is progressing.
Sihlobo said the strength of the agricultural harvest was reflected in trade figures. Agricultural exports totalled $4.1 billion (R66bn) in the second quarter of 2026, a 10% increase from the same period a year earlier.
“This reflects both higher export volumes and improved commodity prices,” he said.
Desry Lesele, senior manager for Agriculture Client Value Proposition at Nedbank, said agriculture had performed strongly despite pressure on the wider economy.
“Those pressures are mainly driven by fertiliser and fuel prices, climate variability, infrastructure bottlenecks and water concerns,” Lesele said. “Despite these challenges, agriculture continues to remain relatively strong.”
Lesele also pointed to the Agbiz/IDC Agribusiness Confidence Index (ACI), released last week which measures sentiment across the agricultural value chain.
The latest index increased to about 53 points, above the neutral mark of 50, representing an eight-point improvement from the previous reading. Lesele said the improvement indicated greater optimism about production conditions, investment opportunities and the sector’s outlook.
“From a banking perspective, strong sector performance and improved confidence support farmers’ investment, the adoption of new technology, expansion plans and reinvestment in farming operations,” he said.
He identified opportunities in agricultural technology and climate-smart agriculture, while noting that input costs remained a significant constraint.
“We might still see another growth in the agriculture space, even though the input cost increases or diesel increases, but agriculture has been resilient enough to stomach all this.”
Lesele added that they remember the previous two quarters where the industry was dealing with foot and mouth disease, but still managed to come out strong.
“The quarter that we just came from, we're dealing with the fuel prices that were rocket high, but we still managed to come out strong and resilient. So we've seen these patterns, but reality is when we always come out a bit resilient to this”
Loffie Brandt, sector head for Agriculture at Absa AgriBusiness, said South Africa was entering the 2026/27 production season with favourable soil-moisture conditions after two consecutive seasons of sustained rainfall.
Healthy dam levels, improved grain-stock availability and generally good veld conditions were providing producers with a buffer against early-season climatic stress, Brandt said.
He said the return of El Niño was an important risk, but that South African agriculture was better positioned than during previous drought cycles.
Improvements in cultivation practices, soil-moisture conservation, production efficiency and seed quality had strengthened producers’ ability to manage climatic risk, Brandt said.
The 2026 spring edition of the Absa AgriTrends Report highlighted improved water availability compared with previous drought periods. It reported that the national average dam level stood at 95.5% in August 2026, compared with 55.0% in August 2016 reflecting the positive impact of several favourable rainfall seasons.
yogashen.pillay@nationalmg.co.za