{"id":860794,"date":"2026-05-23T11:00:00","date_gmt":"2026-05-23T09:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=860794"},"modified":"2026-05-22T16:00:44","modified_gmt":"2026-05-22T14:00:44","slug":"calm-before-the-storm-for-one-of-south-africas-most-important-employers","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/860794\/calm-before-the-storm-for-one-of-south-africas-most-important-employers\/","title":{"rendered":"Calm before the storm for one of South Africa’s most important employers"},"content":{"rendered":"\n

South Africa\u2019s agricultural sector remains resilient for now, but experts have warned that farmers are heading into a far more difficult period as multiple risks begin to converge.<\/p>\n\n\n\n

South Africa currently has around 100,000 farmers who produce agricultural goods for commercial purposes. <\/p>\n\n\n\n

The sector as a whole employs over 930,000 people, making it one of the biggest employment sectors in the country. The sector also has direct implications for livelihoods, fiscal health, and social stability.<\/p>\n\n\n\n

In an interview with Classic Business, Coface Chief Africa Economist Aroni Chaudhuri said the sector has proven itself to be pretty solid.<\/p>\n\n\n\n

He noted that harvest forecasts for the current season remain positive due to good rainfall towards the end of last year, and added that the situation is not concerning for the first half of the year.<\/p>\n\n\n\n

However, he warned that the risks facing the sector are expected to increase dramatically from the second semester onwards.<\/p>\n\n\n\n

Chaudhuri said the agricultural sector is entering a period where pressures will not come from one catastrophic event, but rather from several shocks arriving in sequence.<\/p>\n\n\n\n

\u201cThese price pressures for farmers and even in the most extreme cases, if there is an escalation of the conflict, issues in supply of fertilisers, will be combined with this hotter, drier season that will be coming in,\u201d he said.<\/p>\n\n\n\n

\u201cAnd so that\u2019s when the pressures will materialise. It\u2019s that confluence of shocks that our farmers need to be bracing and steeling themselves for.\u201d<\/p>\n\n\n\n

He explained that higher oil prices would have a delayed but significant effect on agriculture because farming machinery and transport remain heavily dependent on fuel.<\/p>\n\n\n\n

\u201cThe way that this oil price shock transmits to the agricultural sector is actually with a certain lag,\u201d he said.<\/p>\n\n\n\n

While sectors such as transport and energy are hit immediately, agriculture feels the impact later through rising input costs, especially fuel and fertiliser.<\/p>\n\n\n\n

A major weather event will put further pressure on farmers<\/h2>\n\n\n
\n
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Coface Chief Africa Economist Aroni Chaudhuri<\/em><\/figcaption><\/figure><\/div>\n\n\n

He added that the effects of higher oil prices and fertiliser costs could last well into next year, depending on how global conflicts develop.<\/p>\n\n\n\n

Chaudhuri said the biggest concern is that these cost pressures may coincide with the likely return of El Ni\u00f1o later this year.<\/p>\n\n\n\n

\u201cIf my memory serves me right, it\u2019s over 80% probable that El Ni\u00f1o returns. And the probability of a super El Ni\u00f1o is around 50%,\u201d he said.<\/p>\n\n\n\n

He explained that a super El Ni\u00f1o could last up to two years and bring far more severe impacts, including acute rainfall deficits, heatwaves, water shortages, and disruptions to electricity supply and logistics networks.<\/p>\n\n\n\n

\u201cObviously, in the case of a stronger occurrence of El Ni\u00f1o, you would have a much more acute rainfall deficit,\u201d he said.<\/p>\n\n\n\n

Chaudhuri warned that the combination of climate shocks and higher input costs could put severe pressure on farmers\u2019 margins and, eventually, on food prices.<\/p>\n\n\n\n

\u201cYou have less amount of produce to sell, and you also have higher input price pressures, in which case you\u2019re going to have a stronger shock on farmers\u2019 cash flow and by repercussion also on food prices,\u201d he said.<\/p>\n\n\n\n

He stressed that the risks are unlikely to hit all at once, but rather in stages. \u201cThat\u2019s also why it is very important to be conscious of these risks, specifically because not all of them will happen at the same time,\u201d he said.<\/p>\n\n\n\n

Chaudhuri said smaller farmers are particularly vulnerable because they lack the financial buffers and pricing power of larger commercial operations.<\/p>\n\n\n\n

He added that some agricultural segments are more exposed than others. While staple crops such as cereals may remain relatively resilient because demand is stable, higher-value products like fruit are more vulnerable as consumers reduce spending when prices rise.<\/p>\n\n\n\n

Chaudhuri said the livestock sector faces the greatest risk because it was already under severe pressure before the latest threats emerged.<\/p>\n\n\n\n

\u201cThe state of the livestock industry in South Africa was already bad before the onset of this crisis,\u201d he said.<\/p>\n\n\n\n

He noted that livestock farmers are already grappling with disease outbreaks and logistics problems, while higher feed prices could deepen the crisis even further.<\/p>\n\n\n\n

Looking ahead, Chaudhuri said farmers cannot fully protect themselves against increasingly unpredictable climate patterns, but they can prepare by staying informed and managing cash flow carefully.<\/p>\n","protected":false},"excerpt":{"rendered":"

South Africa\u2019s major sector remains resilient for now, but experts have warned that its heading into a perfect storm.<\/p>\n","protected":false},"author":92,"featured_media":860808,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[3793,20924,853],"class_list":["post-860794","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-coface","tag-farmers","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/860794","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=860794"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/860794\/revisions"}],"predecessor-version":[{"id":860809,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/860794\/revisions\/860809"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/860808"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=860794"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=860794"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=860794"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}