After spending two consecutive quarters below the neutral 50-point mark, the Agbiz/IDC Agribusiness Confidence Index rose by 8 points to 53 in Q3 2026, signalling a more optimistic outlook among South African agribusinesses.
The optimism this quarter was primarily among respondents in the financial services sector, grain traders, input suppliers, and the feed industry. Meanwhile, the other respondents maintained their views from the last quarter.
Still, while the overall reading of the ACI is encouraging, the respondents highlighted concerns in their comments about a likely El Niño-driven drought in the upcoming 2026-27 season, ongoing geopolitical tensions, and their impact on input costs and trade disruptions.
Others also expressed concerns about the slow process of opening more export markets to support the long-term growth of agriculture. This survey was conducted in the first week of September 2026 and covered businesses across agricultural subsectors nationwide.
Figure 1: Agbiz/IDC Agribusiness Confidence Index
Source: Agbiz Research, South African Weather Service. (Shaded areas indicate periods of drought in South Africa.)
Discussion of the subindices
The ACI comprises 10 subindices, and most of them improved in Q3 2026. Here is the detailed view of the subindices:
• The market share subindex rose by 6 points to 67 in Q3 2026. This improvement in mood mirrors the ample harvest in horticulture and field crops, and the generally better export performance so far this year.
• The capital investments subindex rose by 29 points from Q2 2026 to 63 in Q3. This was surprising, as high-frequency data show that tractor and combine harvester sales remain weak, with farmers anticipating a challenging drought season in the 2026-27 production year.
• The sub-index measuring export volumes increased by 21 points to 58 in Q3. This is aligned with the strong agricultural exports. For example, in the first half of 2026, South Africa’s agricultural exports amounted to US$7.8 billion, up 11% from the first half of 2025.
• The general economic conditions subindex rose by 10 points to 38 in Q3 2026. While this is a welcome change in mood, it remains unclear whether the economic data support it. The GDP data for the second quarter is yet to be released on September 8, 2026, which is a day after this report.
• On the neutral side, the turnover subindex confidence remained unchanged from Q2 2026, stabilising at 67. The ample harvests of grains, oilseeds, and various fruits and vegetables primarily support these favourable index levels. Similarly, the net operating income subindex stabilised at 50 points in Q3 2026.
• On the negative side, the employment subindex fell by 10 points to 46 in Q3 2026. This is also unsurprising, as data on South African agricultural jobs has shown a slight decline since the start of the year. For example, the Quarterly Labour Force Survey data for the second quarter of 2026 show that the farming sector employed 944k people, down 2% quarter-on-quarter but up 4% from the same period last year.
• The general agricultural conditions subindex fell by 25 points to 36 in Q3 2026. This was mainly due to the expected El Niño drought and the likely negative impact on agricultural production in the 2026-27 season.
Changes in interpretation
• The subindices of the debtor provision for bad debt and financing costs are interpreted differently from the abovementioned indices. A decline is viewed as a favourable development, while an increase signals growing financial strain.
• In Q3 2026, the debtor provision for bad debts subindex increased by 13 points to 46, reflecting likely challenging financial conditions in the sector due to higher input costs, animal diseases and the fears of the likely drought. The financing costs subindex increased by 42 points to 58, reflecting likely higher future financing costs and an expected rise in interest rates.
In essence, the ACI's Q3 2026 results paint an encouraging picture, reflecting a favourable agricultural season we are leaving behind. But going forward, there remains uncertainty.
The likely El Niño drought, higher input costs, lingering foot-and-mouth disease in the cattle industry, port inefficiencies, and the need to open new export markets remain the primary focus for many agricultural and agribusiness stakeholders.
The geopolitical tensions also continue to present challenges, including rising farm input costs and shipping costs. These geopolitical tensions do not bode well for South Africa’s efforts to open more export markets, all of which are essential for the long-term growth of the agricultural sector.
