South Africa’s Agbiz/IDC Agribusiness Confidence Index rose eight points to 53 in the third quarter of 2026. That takes it back above the neutral 50-point mark, after two quarters spent below it. The survey behind the index was conducted in the first week of September by the Agricultural Business Chamber and the Industrial Development Corporation.
This rebound was driven mainly by stronger sentiment among financial services firms, grain traders, input suppliers and the feed industry. Respondents in other subsectors largely held their views from the previous quarter. Among the index’s components, the market share subindex rose six points to 67, reflecting an ample horticulture and field-crop harvest alongside improved export performance. At 67, the subindex is among the strongest readings in the survey, sitting far above the neutral 50 mark.
Exports and investment drive the improvement
The export volumes subindex jumped 21 points to 58, in line with stronger agricultural exports. Exports were worth $7.8bn, around £5.85bn, in the first half of 2026, up 11% on the same period last year. Capital investment rose 29 points to 63, a shift the survey’s authors described as surprising. Tractor and combine harvester sales have stayed weak, which suggests the new investment is flowing into areas beyond heavy machinery.
General economic conditions improved 10 points to 38, though it remains unclear whether broader economic data fully support that reading. At 38, the subindex remains well below the neutral 50 mark, indicating the sector still views general economic conditions as difficult. Turnover held steady at 67, comfortably above the neutral 50 mark, while net operating income was unchanged at exactly that threshold, 50.
Wandile Sihlobo, Agbiz’s chief economist, described the quarter’s results as “an encouraging picture”. The picture is emerging from a favourable growing season that is now drawing to a close. He cautioned, though, that significant uncertainty remains for the months ahead, as the sector looks towards the next planting cycle.
Drought and financial strain cloud the outlook
That uncertainty centres on weather. The general agricultural conditions subindex fell 25 points to 36 – by far the sharpest decline among the index’s components. That drop was driven largely by a likely El Nino-driven drought forecast for the 2026-27 season. South Africa’s Weather Service has separately warned of hot, drier conditions between October and December, as a strong El Nino event forms in the Pacific. The Department of Agriculture has responded by urging farmers to adopt climate-smart practices. These include conserving soil moisture and keeping livestock numbers within the land’s carrying capacity, steps meant to limit losses if the dry spell proves severe.
Financial strain indicators also worsened over the quarter. Provisions for bad debts rose 13 points to 46. Financing costs climbed even further, up 42 points to 58. Both are signs that farmers are feeling the squeeze from higher input prices.
Sihlobo also pointed to geopolitical tensions linked to the conflict between the United States and Iran. That conflict has disrupted shipping through the Strait of Hormuz and raised freight costs across the sector. The employment subindex fell 10 points to 46. That broadly matches Statistics South Africa data showing farming employment at 944,000 people in the second quarter. Employment was down 2% from the previous quarter but still up 4% on a year earlier, leaving the longer-term trend intact despite the quarterly dip.
Respondents also pointed to lingering foot-and-mouth disease in the cattle industry as a further concern. Port inefficiencies and slow progress in opening new export markets added to the list. These pressures add to the structural challenges facing the sector even as near-term sentiment improves.
The figures, taken together, point to a sector drawing confidence from a strong season that is just ending. It is also bracing for a markedly tougher one ahead. The scale of the coming drought will likely determine whether this quarter’s rebound holds into 2027. That is particularly true for subsectors most exposed to rainfall and grazing conditions.
That improvement echoes gains elsewhere on the continent, such as a fresh funding round for Ghana’s shea-focused agritech platform Vitara, even as the same El Nino pattern driving South Africa’s drought risk has already fuelled deadly wildfires in Peru.
