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Bleak third quarter for agri-sector

DATA obtained in July shows a fairly good start to the third quarter of 2022, although the outlook is bleak with the recent foot-and-mouth disease outbreak leading to a ban on the movement of cattle in South Africa.

According to an analysis by Simonis Storm, the Meat Board of Namibia expects the 21-day movement ban to result in lower marketing activity during September 2022, as it did in August, leading to weaker performance in the third quarter of 2022.

The number of local livestock sent for slaughter continues on a downward trend, decreasing by 17,3% on average in July 2022, with cattle down by 29,6% year on year (y/y), sheep declining 7,9%, goats dropping 17,4% and pigs decreasing 14,4% y/y.

On the other hand, live exports grew by high double digits during July 2022. Cattle exports increased by 16,1% y/y in July 2022, sheep exports went up 11,1% and goat exports were up a massive 117,8% y/y.

Total marketing activity for cattle, sheep and goats combined increased by 39,9% y/y in the second quarter of 2022 compared to the second quarter of 2021.

“Given that livestock farming accounts for 35,1% of the agriculture industry in Namibia, we believe these improved marketing growth figures should bode well for the industry’s GDP growth in the second quarter of 2022,” said Simonis.

The Namibian Agronomic Board (NAB) banned the importation of 13 horticulture products in July 2022, and further reduced this list to 10 products for August 2022.

This is indicative of local supply having improved, specifically for beetroot, cucumbers and potatoes.

However, shortages in various horticultural products are expected for the remainder of 2022, according to the NAB. This implies that local supply will be largely insufficient, increasing the import requirement for basic food items.

“While global food prices are showing signs of moderation, local shortages are likely to keep local food prices elevated, as it takes time for lower global prices to filter through,” said Simonis.

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