Source: Wandile Sihlobo, Agbiz, photo credit: Farming Portal/Agbiz
After deteriorating from the 50-point mark to 39 in the second quarter, a period during which there was heightened uncertainty about whether the agriculture and agribusiness sectors would operate efficiently when most sectors of the economy were closed under the lockdown regulations, the Agbiz/IDC Agribusiness Confidence Index (ACI) rebounded to 51 in the third quarter of 2020.
• A level just above the neutral 50-point mark implies that agribusinesses are only marginally optimistic about business conditions in South Africa. This corroborates various high-frequency data, which show that most of South Africa’s agriculture and agribusiness sectors have not been severely affected by the ongoing COVID-19 crisis, as the sector was classified as essential and largely did not close down throughout the lockdown period.
• The subsectors that were severely affected by the lockdown regulations include the wine and tobacco industries; whose sales were prohibited for certain periods. This third-quarter survey was conducted in the first two weeks of September and covers agribusinesses operating in all agricultural subsectors across South Africa.