South Africa's agribusiness sector is facing pressure following the introduction of a 30% U.S. tariff on agricultural exports in August 2025. The tariff has affected industries such as citrus, wine, and macadamia nuts, with 35,000 jobs in the citrus sector at risk. Despite a 26% increase in Q2 2025 farm exports to the U.S., reaching US$161 million, the long-term competitiveness of these exports remains uncertain.
Tariffs and diversification
The U.S. tariffs, part of a "reciprocal" trade regime under the Trump administration, have highlighted the vulnerabilities of export-dependent agribusiness. Citrus and table grapes, which make up 80% of agricultural exports to the U.S., are under pressure from both tariffs and EU phytosanitary regulations. While the U.S. remains an important destination, accounting for 4% of agricultural exports in Q2 2025, South Africa is directing attention to alternative markets within BRICS and the Gulf. Avocado exports to China, Japan, and India are growing, while new agreements have opened channels for maize and livestock.
China is South Africa's largest trading partner, responsible for 20% of its exports. However, interruptions such as the suspension of cloven-hoofed animal imports due to disease have shown the risks of reliance on a single market. Gulf States, with increasing demand for premium agricultural goods, are being targeted, supported by a US$13 billion government programme for port modernization and cold-chain upgrades to meet Asian quality standards.
Digital farming
Alongside market diversification, digital farming practices are expanding. By 2025, more than R2 billion (approximately US$108 million) is projected to be allocated to precision agriculture. It is expected that 60% of farms will adopt satellite monitoring, AI-driven analytics, and blockchain traceability. These systems are projected to increase yields by up to 30% and reduce water use by 30%, factors that are relevant for production in a climate-sensitive environment.
AgriTech startups are receiving investment. Nile and KHULA raised US$17.4 million in equity funding in 2025, and mobile advisory platforms are providing smallholder farmers with access to data and market information.
Synergies between technology and markets
The combination of diversification and technology is creating new export opportunities. Precision agriculture is supporting compliance with Asian quality requirements, while digital traceability is adding value for exports to China and the Gulf. These developments are expected to contribute to employment, with AgriTech innovations projected to create 15% more skilled jobs in the sector by 2025.
The African AgriTech sector attracted US$1.6 billion across 137 deals in Q1 2025, with South Africa noted as an early adopter of climate-smart production systems.
Source: AI Invest