Strong demand for food positive for agriculture

Ernst Janovsky, head: Centre of Excellence, at Absa AgriBusiness said at the launch of Agricultural Outlook 2016 on Wednesday, 18 November that although South Africa’s GDP is expected to grow at a slower rate in 2016, the strong demand for food is positive for agriculture. Furthermore, agriculture remains profitable despite lower commodity prices. The population in Africa and Asia is expected to grow by about 2 billion by 2050, which implies that agricultural production needs to double over the same period. This creates excellent opportunities for investment in agriculture. With regard to the dairy sector, it is expected that international demand will outstrip supply, resulting in the strengthening of global prices. Export opportunities are expected to open up, with South Africa being in a favourable position owing to the weak rand. The South African dairy industry grew by 11% in 2014 despite the number of dairy farmers declining continuously. Famers are encouraged to improve productivity by using new technology. To read Agricultural Outlook 2016 online, click HERE.