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South African farmers and agribusinesses continue to show resilience and optimism. The Agbiz/IDC agribusiness confidence index (ACI) — a sentiment indicator of business conditions in the sector — remains at encouraging levels, though it has declined from the high levels it reached at the start of this year.
After a notable uptick in the first quarter of 2025, the ACI fell by five points in the second quarter to 65. Any level above the 50 neutral point signals optimism.
Regarding the slight decline, most respondents identified the uncertain global trade environment, lingering geopolitical tensions and animal diseases locally as key factors constraining the sector.
Still, the current level implies that South African agribusinesses are optimistic about business conditions in the country. The good summer rains and improvements at the ports, which have enabled exports with minimal interruptions, are among the positives.
This survey was conducted in the second week of June, covering various agribusinesses operating in all agricultural subsectors across South Africa.
An important point to remember when reviewing the index is that sustained optimism is critical, especially in the long run, for fixed investment in the agriculture and agribusiness sectors.
The ACI also serves as a leading indicator of agricultural growth prospects over time. We can thus expect slightly better farming output data for the second quarter. The favourable production conditions for field crops, wine grapes and various fruits and vegetables will be the primary drivers of the sector’s performance.
It is true that we have yet to see the full impact of the foot-and-mouth disease outbreak. This has started to affect sentiment and the impact is likely to linger.
In essence, the ACI results for the second quarter of 2025 indicate that the sector’s mood remains upbeat about the recovery this year. Still, the results also show that the recovery will likely be uneven as some key subsectors struggle with animal disease.
Notably, the dominance of geopolitical concerns in respondents’ views illustrates the strong dependence of South Africa’s agricultural sector on export markets and the need to diversify these markets. China, India, Saudi Arabia and Egypt are among the key markets we should target for expansion. Still, as we drive diversification, we must work vigorously to retain access in various markets across the EU, the UK, Africa, Asia, the Middle East and the Americas.
Also significant are the collaborative efforts between business and the government in addressing biosecurity issues, as well as efforts to promote more efficient network industries and better municipal management, and the implementation of the agriculture and agro-processing master plan, which is critical to the long-term growth of the sector.
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