LONDON, Dec. 18, 2016 /PRNewswire/ -- Includes 3 FREE quarterly updates
We continue to maintain our mixed outlook for the South African agricultural market as a whole in our latest Q1 2017 report update. We believe that corn and wheat - crucial grain sectors of the country - took severe losses due to the El Niño-related drought. Nevertheless, we expect them both to rebound out to 2020, as the weather conditions improve. Furthermore, livestock production (poultry and pork) and sugar consumption will both embark on a positive trajectory. Over the medium term, a weak rand, weather volatility and falling farm incomes will exert downward pressures on the market. We view South Africa as a generally lucrative market with strong economic growth, rising incomes, a solid population base and growing discretionary spending powers coupled with rising per capita private final consumption levels. Our production and consumption forecasts are predicated upon higher food consumption and a growing national appetite for meats and confectionaries among other commodities. We do believe that the market will track upwards but caution that weather volatility and currency weakness remain persistent features, especially as South Africa must import a variety of foodstuffs to feed domestic demand.
- Corn production will take another year of heavy losses in 2015/16 due to severe drought, declining by an additional 25.7% y-o-y to reach 7.9mn tonnes.
- Sugar production will decline by 23.2% to reach 1.7mn tonnes in 2015/16, as El Niño and severe regional weather droughts hit output.
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