Tag: ClimateRisk

With El Niño conditions now established, the latest climate risk assessments suggest Southern African agriculture is better prepared for the period ahead. El Niño conditions have now formed in the Pacific Ocean. Climate forecasters indicate a high probability that the event could strengthen significantly over the coming months. Moreover, the existing fragile environment and market conditions make this El Niño event even more worrying.

South Africa’s agricultural sector is under growing pressure to produce more food with fewer resources. Rising input costs, infrastructure strain, and climate volatility are reshaping the risk commercial farming landscape. Margins continue to tighten. As operational buffers shrink, farming businesses are becoming increasingly exposed to production, financial and market vulnerabilities.

Recent severe weather events across South Africa have once again highlighted the agricultural sector's growing exposure to climate-related risks. While hail has historically been one of the most visible threats, farmers increasingly face a combination of hazards. These include strong winds, heavy rainfall, localised flooding and unseasonal weather patterns. Often, these hazards occur within the same production cycle.

South African regulators introduced a more structured approach to climate-related disclosure for insurers. Since then, expectations have tightened to mirror approaches in other markets. Regulators now treat these risks as having direct financial consequences for the sector.