Agri’s expected green shoots to wither?

Jo-Maré Duddy – Amid the widespread rains of recent days came the Bank the Namibia’s warning that a stormy outlook still clouds the agricultural sector in 2020.In its latest economic outlook released on Thursday, the Bank of Namibia (BoN) projects another yet another recession year for agriculture, forestry and fishing. The central bank estimates the sector will grow -0.1% this year, following estimated growth of -12.3% in 2019 and actual growth -2% in 2018.The BoN’s latest forecast is in sharp contrast of the one released last August, when the central bank expected that the sector would blossom by 5.8% in 2020.“The agricultural industry is estimated to have registered a deep contraction [growth of -12.3%] in 2019 due to a devastating drought, which had negative effects on both crops and livestock,” the BoN says in its latest outlook. RecoveryLivestock levels at the beginning of 2020 are very low, holding back reproduction numbers, it continues.The BoN expects the livestock sector grew by -21.8% last year and will grow by -5.5% in 2020. Last August, the estimations were -7.5% and 0.2% respectively. The BoN’s outlook for crop farming has also weakened significantly. It now forecasts growth of 3% for this year, down from 9.2% in August. The central estimated crop farming and forestry grew by -20.8% last year.“The agricultural sector is projected to register a marginal contraction in 2020 and recover to positive growth in 2021 based on expected improvements in the rainfall,” the BoN says.It currently predicts growth of 1.2% for livestock farming in 2021, while the forecast for crop farming and forestry is 2.8%.Analysts’ expectationsThe unprecedented marketing of cattle over the last five years has resulted in a major reduction of the national cattle herd, Cirrus Capital says in its latest economic outlook. The analysts expect grow of 2.3% in livestock farming this year.According to Simonis Storm (SS), the challenge for livestock farmers remains the feed for cattle. “Due to the drought, some of the cattle to be used for restocking has been given up for slaughter. Favourable weather is needed in order to restock,” SS says.Cirrus says “should weather patterns remain favourable, this would spur livestock farmers to reduce sales and rather focus on restocking their herds”.“This should create further value in the livestock industry, as value added for livestock should be captured over the lifespan (as opposed to the time of slaughter). “The downside to this is potentially reduced activity further downstream (i.e. meat processing, under manufacturing) as well as reduction in the supply of (domestic) beef, resulting in higher food price inflation for this line,” Cirrus says.According to Cirrus livestock farming contributes approximately 60% to agricultural gross domestic product (GDP). ManufacturingThe BoN estimates that manufacturing grew by 2.8% in 2019 and forecasts growth of 0.9% for this year. Growth in meat processing is estimated at 12.2% in 2019 and a figure of -4.1% is forecast for this year.Cirrus anticipates overall growth of -3.1% for manufacturing in 2020 and -20% for meat processing.The analysts expect growth of 6.3% for crop farming and forestry.SS says food security remains a challenge in Namibia amid low production and rising food prices. “The basic food products (staples such as cereals) have been hit hard by the drought in 2019. If the forecasted weather conditions transpire, it could benefit early crop growth in 2020,” SS says.

Agri’s expected green shoots to wither?

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Republikein 2025-09-10

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Agri’s expected green shoots to wither?

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