Here is Sihlobo....

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He says South Africa’s agricultural sector had a solid start to the year with first-quarter gross value-added growing by 27.8% quarter-on-quarter on a seasonally adjusted and annualised basis. It was noted then that the succeeding quarters would likely continue to show strong growth, a view that is still maintained, but the second-quarter expansion could be somewhat milder than the first quarter, possibly at a range of 20-25% q/q on a seasonally-adjusted and annualised basis. The key drivers will remain somewhat the same as the previous quarter, which was an uptick in animal products, field crops and horticulture. 

Within field crops, sugar was the main driver, while in horticulture, deciduous fruits were the primary drivers of the bounce in the first quarter. In the second quarter, however, summer grains and oilseeds will likely be the key drivers of growth as harvest processes and deliveries started gaining momentum during this quarter going into the third quarter, as the season was delayed due to dryness at the start of it. Meanwhile, in the horticulture industry, citrus most likely dominated in the second quarter. We doubt that the animal products remained as robust in the second quarter as slaughtering activity softened when the country went into the strict Covid-19 lockdown at the end of March. If anything, the animal products activity will probably recover in the third quarter, which is when restaurants started opening more widely. He says there is still optimism about the performance of this sector in 2020, maintaining a forecast for the year to average at about 10% y/y (compared to -6.9% y/y in 2019). Other institutions such as the Bureau for Food and Agricultural Policy (BFAP) are more optimistic than Agbiz placing their agricultural growth forecast for the year at 13% y/y. This comes before Statistics SA  is expected to release the second-quarter Gross Domestic Product on September 8th this year, and with the high-frequency data from the farm-level such as production figures and prices, Agbiz is inclined to believe that the sector will register yet another good reading in the second quarter.

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