Here is Sihlobo ...

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He says confidence in South Africa's agribusiness sector slumped in the second quarter of this year to the lowest level since the third quarter of 2009 at the height of the global financial crisis, reflecting the impact of the Covid-19 health crisis on the overall economy.  This index measures the sentiment in the agricultural and agribusiness sector and it usually is a lead indicator of how the agricultural economy is to perform in this current moment. 

The Agribusiness Confidence Index, which is sponsored by the Agricultural Business Chamber (Agbiz) and the Industrial Development Corporation, fell from the 50-point mark in the first quarter to 39 in the second.  He says a level below the neutral 50 mark implies that agribusinesses are downbeat about prevailing business conditions in South Africa.  

Anything at 50 or below shows business conditions in the South African environment is not as conducive or agribusinesses are down beat at that moment about business conditions in South Africa. The index reflects the perceptions of at least 25 agribusiness decision-makers on the 10 most important aspects influencing a business in the agricultural sector, namely turnover, net operating income, market share, employment, capital investment, export volumes, economic growth, general agricultural conditions, debtor provision for bad debt and financing cost.

He says when the level is below 50 the levels of investment in the South African farming sector might be constrained which in return shows in the long run growth prospects of the sector might come into question. 

That was Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa, Agbiz, only on the Agri Hour. To listen to these inserts again go to http://www.ofm.co.za, click on News, Agriculture, the Agri-Hour. Also tune into OFM on weekdays at 11:00 and 13:30 for the latest news in the agricultural sector. 

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