By Paul Makube, Senior Agricultural Economist, FNB Commercial
Despite the serious trade related headwinds in the second quarter of 2025, South Africa’s agriculture GDP again posted strong growth and a second-best performer with a quarterly increase of 2.8% q/q (sa) in Q2 of 2025 and a 0.1 of a percentage point contribution to overall SA GDP growth, according to Statistics South Africa.
Meanwhile, agriculture’s Q1 growth was revised upwards from 15.8% in the previous update to 18.6% with contribution up from 0.4 to 0.5 of a percentage point to SA GDP. Overall, SA GDP improved from a 0.1% growth in Q1 to 0.8% in Q2 of 2025
Gains in horticulture and animal products underpinned the recent stellar performance of the agriculture sector in Q2 of 2025. Good horticulture harvests on the back of favourable production conditions increased product availability for both the domestic and export markets.
Consequently, export revenues as per the Trade Map data jumped 10% y/y to US$3.71 billion in Q2 of 2025 on higher volumes and better prices for commodities such as citrus, apples, pears, maize, wine, nuts, fruit juices, avocados, and wool.
This is despite the deterioration in the global trade environment following the unilateral imposition of 10% to 50% on all exporters to the US as a measure to correct trade imbalances. South Africa has since been impacted by a 30% tariff from the 8th of August 2025.
This knocked confidence in the agriculture sector as reflected in the Agbiz/IDC Agribusiness Confidence Index (ACI)which fell by 5 points in Q2 to 65 in Q2 of 2025. Although the ACI eased further to 63 points in Q3 in the latest update, both Q2 and Q3 reading are still way above the breakeven level of 50 points which indicates industry resilience.
The livestock industry faced a devastating biosecurity threat of a foot-and-mouth disease (FMD)outbreak in Q2 which resulted in export bans and quarantine of some of the large cattle processors. This caused a spike in meat prices as buyers scurried for supplies due to the temporary halt to slaughtering in FMD affected operations. Meat inflation in Q2 of 2025 rose by 3.6% relative to Q1 of 2025, and up by 4.7% relative to the same period in 2024.
Meanwhile, the National Crop Estimates Committee’s August 2025 update of the total 2024/25 commercial summer crop harvest showed a further upward adjustment from July by 4.3% to 19.55 million tons, which is 25.9% higher year-on-year (y/y). This bodes well for a further positive agriculture GDP performance in Q3 of 2025.
Meanwhile, the latest outlook indicates better seasonal production conditions for the 2025/26 crop season with the La Nina weather pattern back in the forecast. This will boost agriculture activity with the onset of the summer crop season as the year tails off.
