If we had the power to control the weather, this would be one of the best seasons in the South African grain and oilseed industry. Almost all the high-frequency data paints a positive picture. Last month, it was the farmers’ intention to plant data which shows that South African farmers intend to increase the area planting for summer grain and oilseed by 5 percent from 2017/18 season to 4.03 million hectares. Most summer crops showed an uptick, with the exception of sunflower seed and groundnuts (Figure 1 shows major grain and oilseed plantings. This is partly driven by the favourable agricultural commodity prices.
The optimism regarding planting was corroborated by the tractor sales data, which shows that in October 2018, South African farmers purchased 817 units, which is highest levels since October 2014 (see Figure 2 below). This is a big deal, especially after all the talk of farmers not planting and all. You see, South Africa’s tractor sales for the first 10 months of this year amounted to 5 818 units, which is 9% higher than the corresponding period last year.
This is all good news which I am sure many people will be happy to see, but this is by no means a deciding factor of whether South Africa will have a good harvest. The weather will be the key deciding factor, especially the expected El Niño. I’ve discussed its potential impact on South African crops here.
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