The most appropriate thing to write today, given that I am currently gazing over the beautiful wine farms of Stellenbosch, would indeed be wine. But I will leave this duty to my colleague at Business Day, Michael Fridjhon (his columns appear on Fridays). Instead, I will be blogging about good old maize.
I was going to Tweet about this, but thought it would be better to formalise the information and provide a bit of context. Yesterday, the National Crop Estimates Committee lifted its estimate for South Africa’s 2017/18 commercial maize production by a percentage point from the previous month — to 12.9 million tonnes. This is due to expectations of higher yields.
The upward revision was mainly on white maize, which was lifted to 6.7 million tonnes from 6.6 million tonnes. Meanwhile, the yellow maize production estimate was revised up marginally and is currently at 6.2 million tonnes.
Moreover, the non-commercial or smallholder maize production estimate was left unchanged from last month, at 593 975 tonnes (down by 18 percent from last season).
If we aggregate both commercial and smallholder farmers’ figures, then South Africa’s 2017/18 total maize production is estimated at 13.5 million tonnes. While this is well above market expectations, it is well below last season’s record harvest of 17.6 million tonnes.
Overall, this data has reinforced the view that South Africa’s maize market will be well supplied in the 2018/19 marketing year. In other words, the expected harvest, combined with a large opening stock at the beginning of this marketing year, could amount to 16.4 million tonnes. This is well above the local maize demand of 10.7 million tonnes.
Against this backdrop, South Africa’s 2018/19 marketing year maize exports could, at least, amount to 2.3 million tonnes — down by 4 percent from the volume exported in 2017/18. The SAFEX maize prices could also remain at fairly lower levels, sideways around R2000 per tonne.
All in all, improved maize production estimates call for a celebratory glass of wine, but perhaps don’t go breaking the bottle just yet, given expected exports are lower than last year.
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