I have recently discussed South Africa’s maize production dynamics, but I thought it would be good to provide an update following the recent data releases this week.
One of those data releases was the United States Department of Agriculture’s monthly update. The Department left its estimate for South Africa’s 2017/2018 maize production unchanged from the last month at 13.5 million tons.
The forecast is above the average production of about 12.5 million tonnes seen the past couple of years, however, it is lower than the previous season’s record harvest of 17.6 million tons due to a decline in area planted and expectations of average yields in some areas.
Also worth noting is that this estimate is in line with the national Crop Estimates Committee’s estimate for overall production (commercial and non-commercial). The non-commercial production, which is subsistence farming, accounts for a 6% share in the estimated harvest of 13.5 million tons.
The key message from these numbers is that South Africa’s maize market will be well supplied in the 2018/2019 marketing year (which started on 01 May 2018 and will end on 30 April 2019). With a carryover, the total maize supplies could reach 16.3 million tons, well above the local demand of 10.8 million tons. (To restate, the supplies figure includes an opening stock and the 2017/18 expected production).
This essentially means that South Africa’s 2018/2019 marketing year maize exports could, at least, amount to 2.4 million tons, down by 4% from the volume exported in 2017/2018. Most importantly, this suggests that the SAFEX maize prices could remain at relatively lower levels for some time, all else being equal.
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