South African farmers are navigating an increasingly complex operating environment marked by overlapping global shocks, rising input costs and climate variability. However, agricultural economists say the sector continues to demonstrate resilience and the ability to identify opportunities despite these pressures.
These insights were shared during the launch of the AgriTrends autumn edition hosted by Absa Group Limited’s agribusiness division, where economists Nkhensani Mashimbyi and Zama Sangweni outlined key developments shaping the agricultural landscape.
Recent geopolitical developments, including the ongoing Russia–Ukraine War and escalating tensions in the Middle East, are adding to the uncertainty already affecting global agricultural markets.
“We used to think in cycles: a drought year followed by recovery, a price spike followed by correction, but increasingly the system does not reset before another shock arrives,” Mashimbyi said.
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Rising energy costs and currency volatility
According to Mashimbyi, energy markets are emerging as one of the most immediate risks to agricultural profitability. Rising global tensions have already pushed Brent crude oil prices higher, increasing fuel costs across the agricultural value chain.
Diesel remains a key input in farming operations; higher oil prices affect on-farm activities as well as transport and processing costs.
At the same time, geopolitical uncertainty is contributing to volatility in the South African Rand as investors shift capital towards safer markets. A weaker currency raises the cost of imported inputs such as fertiliser, chemicals and fuel.
“When crude oil prices rise, and the currency weakens, it effectively creates a double impact on input costs. That pressure ultimately filters through the entire agricultural value chain.”
Nkhensani Mashimbyi
Climate variability is another growing concern across South Africa’s farming regions. Mashimbyi said rainfall patterns in summer rainfall areas are becoming less predictable, with precipitation increasingly occurring in short, intense bursts rather than evenly distributed throughout the season.
This raises risks of flooding, waterlogging, and yield disruptions across crop industries. Climate models also suggest a possible shift toward El Niño conditions in the 2026/27 production cycle.
“It signals higher risk conditions, particularly around timing of rainfall, which is critical for summer crops and grazing,” she explained.
According to Mashimbye, globally, grain markets remain relatively well supplied following recent strong harvests. While favourable for food inflation, lower prices are creating margin pressure for producers.
South Africa’s wheat industry remains particularly vulnerable, she added. Domestic production has remained relatively flat, and the country continues to rely on imports to meet demand, leaving local prices exposed to global market movements.
Opportunities remain for horticulture
Despite mounting challenges, Sangweni emphasised that South African agriculture continues to demonstrate resilience and adaptability.
According to Sangweni, three major forces are currently shaping horticultural industries: geopolitical tensions, market diversification and climate variability.
“There are specific industries where the war coincided with existing dynamics and amplified the importance of market diversification. We do have rain when we expect to have rain, we just have it at levels that are unanticipated,” she explained.
The outlook for South Africa’s citrus industry, however, remains relatively favourable despite logistical uncertainty linked to global conflicts. “We will be having slightly better prices than we saw in the previous season, and therefore it is quite a good story for South Africa,” she said.
Diversifying export markets is becoming increasingly important across several horticultural sectors.
In the pome fruit industry, around 12% of South African apple exports and 21% of pear exports are typically destined for the Middle East, making the region an important market.
Impact of trade policies
Meanwhile, China is considering reducing its 10% tariff on South African apples and pears to zero. “If this comes into fruition, this would go very well for the upcoming pome season in South Africa,” Sangweni said.
Trade policy in the United States has also been closely monitored. Agricultural products, including oranges, macadamias and fruit juice, were granted tariff exemptions during recent policy adjustments, although some uncertainty remains.
Sangweni said the defining feature of South African agriculture remains its ability to adapt quickly to changing circumstances. “We are extremely resilient. There is nobody who is as persistent as our agricultural sector.”
She pointed to the sector’s rapid response to shifting US tariff policies as an example of how producers adapt to new conditions.
Click here to download the Absa AgriTrends 2026 autumn edition for free.
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