Input costs to hit horticulture sector margins

April 26, 2022

Namibia’s horticulture farmers will experience low profit margins due to steep hikes in global fertilizer and fuel prices, analysts have said.

Research firm Simonis Storm says fertilizer prices in South Africa increased by 128% in 2021 on average in United States Dollar terms, following a 155% rise in international fertilizer prices last year, with petrol and diesel prices having increased by 51% and 60% respectively in the last 12 months.

 “These factors imply a conservative approach to overall growth forecasts in the agricultural sector for the rest of 2022.”

The Bank of Namibia forecasts 3.8% growth for the agricultural sector for 2022, with 4.5% growth forecasted for livestock farming, 3% for crop farming and 3.8% for fishing.

The forecasts come as Agriculture minister Calle Schlettwein warned that rising input costs will affect Namibia’s agricultural production, with possible job losses in the near future, citing high fertilizer and fuel costs.

Meanwhile cattle marketing decreased by 12.4% y/y in March 2022, sheep down 34.6%, goats down 6.4% and pigs declining by 6.8%.

“On a quarterly basis, the livestock sector recorded positive growth, where improvements in cattle and sheep slaughtering by export approved abattoirs mainly supported growth in the sector. Beef and sheep exports increased by 137% and 35% in 1Q2022 respectively, compared to the same period last year. These are early signs of the herd rebuilding season following the drought, coupled with soft commodity prices incentivising additional supply (except pig prices),” the Simonis Storm report said.

Live cattle exports for the period under review decreased by 4.3% y/y, while sheep increased by 43.9% and pigs by 16.8% y/y.

“28% of beef exports were sold to South Africa, 27% to Europe (mainly Norway) and 18% to China. South Africa and Botswana were the main export destinations for sheep and pork during March 2022.”

To support the growth of the country’s horticulture sector, the Ministry of Agriculture has budgeted N$6 million to assist with subsidized inputs.

 

 

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Last modified on Thursday, 28 April 2022 10:30

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