Geopolitical and weather risks add to long-standing challenges for SA agriculture

South Africa’s agriculture is starting the second half of the year with profound uncertainty about the path ahead. The risks arise from both domestic and global factors.

From a global perspective, the ongoing war between Iran and the US and its implications for supply chains dependent on the Strait of Hormuz may continue to put upward pressure on critical input costs, mainly fertiliser and fuel.

Just this past weekend, we learnt of more hostilities and Iran’s declaration that the Strait of Hormuz is closed until further notice. This brings us back to the start of the war, where we faced huge uncertainty about fuel and fertiliser supplies, among other products, due to logistical challenges in the region.

The prices of fuel and fertiliser are not yet at the levels we saw right after the start of this war and may remain more volatile than normal. This is a pain point when considering the operating conditions in the farming sector.

Moreover, South Africa is in the export period for grains, fruits and some meat. Therefore, the probable higher shipping costs and logistical challenges in the Middle East have brought us back to the position we were in a few months ago, with fears of export disruption.

The Middle East accounts for around 8% of South Africa’s agricultural exports, valued at about $15.1-billion in 2025. Therefore, current friction risks reducing exports to the region, which would further weigh on South African farmers’ finances if the country can’t reroute products efficiently to other markets.

El Niño

Another challenge, which we have discussed at length in the past, is the probable drought resulting from El Niño during the 2026-27 summer crop season, which starts in October.

On this, we believe that South Africa’s better soil moisture, higher dam water levels and improved seed cultivars used by farmers place the country in a slightly better position than other countries in the region. Still, when considering the probable drought and higher input costs, there is considerable pressure on farmers ahead of the new season.

On the domestic front, we face multiple issues that require both the government and organised agriculture to work collaboratively. One of these issues concerns the government’s openness to registering new genetic techniques for seeds.

Given the challenges posed by climate change, the sector’s long-term sustainability will require nimble decision-making by the government. For the South African agricultural sector to remain competitive and cope with a changing environment, seed breeding must remain a priority. Now, South Africa has adopted a lacklustre approach to the registration of new genetic techniques, and this may prove costly in the medium to long term. The regulators must change this approach and return the country to its long-known position of embracing technology in farming.

New markets

While we are approaching a drought period and are concerned that agricultural output may decline in 2027, South Africa’s push to diversify into new markets must continue.

The recognition of this need is well articulated, but material intervention remains missing. Such an intervention would entail increasing human capital across South Africa’s missions globally and placing greater focus on economic diplomacy and trade issues.

This would also require that, in Pretoria, the government has essential staff who work well with industry and negotiate new markets for the country.

For much of 2025, the South African government conducted official state visits to various countries, and export issues were discussed. But until we have technical teams that follow up on such visits, we will not succeed. The long-discussed need to review the Southern African Customs Union to give South Africa some flexibility in opening new export markets is part of the necessary trade reconfiguration effort.

Domestic constraints

Logistics, roads, rail, and port efficiency are also vital steps that must remain priorities beyond high-level conversations. Material collaboration between the business and private sectors to increase efficiency in Cape Town is vital.

Beyond these aspects, many facets of land reform, animal disease, stock theft, and poor municipal performance, among other challenges, continue to present difficulties for the sector. Therefore, the work of various government and organised business interventions should continue to focus on these.

When geopolitical shifts occur, South Africa’s agriculture will have to confront these domestically oriented constraints to propel the sector’s growth and create jobs. DM