Arable crop production rose sharply last year, data by the statistical office (KSH) showed. The two largest crops – wheat and maize, generated output growth of 4.9% and 32.8% respectively. The output increase was mainly on account of higher yields, which rose especially sharply in the case of maize. The maize yield posted a new record level, which was due to very favorable weather conditions, the KSH said. The third largest crop – sunflower, also posted a strong 21.6% output growth in 2016, both due to a larger harvested area and a higher yield. All crops posted higher production last year with the exception of potatoes, which fell by 10.9%. Similarly, the output level was higher than the 2011-2015 average for all crops with the exception of potatoes.
We think that the data supported the central bank expectations that agriculture will have a positive output on GDP growth in 2016. The contribution of agriculture to growth has increased noticeably from Q1 to Q3, which likely reflected the strong harvest season.