Absa finds in its latest AgriTrends report that South Africa's agriculture sector is better positioned for an incoming drought cycle than in previous years owing to record soil moisture.

This should soften the impact of forecast El Niño conditions, it states.

"While the return of El Niño conditions is expected to increase climate risks for South African agriculture during the 2026/27 summer production season, the sector is entering the cycle from one of its strongest starting positions in recent years," Absa notes, explaining that El Niño is typically associated with drought, lower crop yields and rising food prices. 

However, the AgriTrends report says the relationship between El Niño and agricultural performance is far more complex, with outcomes influenced by factors such as soil moisture reserves, water availability, grain stocks, producer adaptation and regional weather conditions.

Absa AgriBusiness agriculture sector head Loffie Brandt confirms that South Africa is entering the upcoming production season with favourable soil moisture conditions following two consecutive seasons of sustained rainfall. Healthy dam levels, improved grain stock availability and generally good veld conditions are providing producers with an important buffer against early-season climatic stress.

"The key climate story is not simply that El Niño is returning, but that South African agriculture is considerably better positioned than during previous drought cycles," he notes.

Brandt continues that this stronger starting position also reflects the success of adaptive measures having been adopted across the agricultural sector.

Improvements in cultivation practices, for example, have aimed to conserve soil moisture and enhance production efficiency. Additionally, advances in seed quality have supported the development and uptake of better-performing cultivars, strengthening producers' ability to manage climatic risk.

Many producers are indeed entering the 2026/27 season in a stronger position than during previous drought cycles, AgriTrends affirms.

Moreover, Absa finds that the national average dam level stood at 55% in August 2016 during the previous major drought cycle compared with a healthy 95.5% level in August this year, reflecting the positive impact of several favourable rainfall seasons.

The report also highlights strong soil moisture reserves across much of South Africa's central production regions, which were replenished by extended summer rainfall and provide important support for crop establishment ahead of planting.

Despite these favourable starting conditions, Brandt cautions that producers should not become complacent.

The current climate outlook points to a high probability of El Niño conditions persisting throughout the 2026/27 summer production season, increasing the likelihood of warmer and drier conditions across key grain-producing regions.

“The timing and distribution of rainfall may prove more important than total seasonal rainfall. Even seasons with near-normal rainfall can experience production losses if rain falls at the wrong time, resulting in moisture stress during critical growth stages in production areas,” Brandt says.

The AgriTrends report further identifies the frequency and intensity of extreme heat conditions as a growing risk factor alongside rainfall.

It says elevated temperatures can affect grain pollination, increase heat stress in vegetables and contribute to heat damage in fruit production, making temperature patterns an increasingly important determinant of agricultural outcomes.

While the sector's strong starting position does not eliminate climate risk, it does provide a stronger foundation from which producers can manage weather-related challenges.

"The question facing the industry is no longer whether El Niño will develop, but how effectively South Africa's favourable starting conditions can help buffer its impact. Production outcomes will ultimately depend on rainfall distribution, soil moisture retention and the occurrence of extreme heat events during the most critical stages of the growing season," Brandt states.

He suggests that producers closely monitor rainfall forecasts and soil moisture levels ahead of the critical summer planting window from October to December.

Brandt warns that dryland grain producers, particularly those farming soils with lower water-holding capacity, may face increased risk from prolonged dry spells, which are often more severe during El Niño years.

"In the current environment, the focus should be on efficient water use, prioritising inputs that support yield potential, and strengthening financial resilience ahead of the challenging season ahead," Brandt concludes.