The South African Grain Information Services releases the country’s grain trade data for the week of 7th of February 2020 by midday. The data covers maize and wheat. While these data are important for tracking the movement of grains into and outside South Africa, they are rarely market moving. This is because of the week’s long lag in reporting. By the time we get a glimpse of the numbers, the key grain market players are probably aware of the levels of sales.
South Africa is generally a net exporter of maize. The exports for the 2019/20 marketing year have thus far amounted to 935 980 tonnes (both white and yellow maize). This equates to 71% of the export forecast for this season, which is an estimated 1.32 million tonnes.
The leading markets include Botswana, Ethiopia, Mozambique, Namibia, Zimbabwe and Eswatini. Taiwan, Vietnam, Japan and South Korea, who are usually amongst the key buyers of South Africa’s maize have been oddly quiet in the 2019/20 marketing year. This could be because of favourable prices elsewhere.
But one could see them returning to the South African maize market in the 2020/21 marketing year which starts in May 2020. The new season for maize production is expected to improve by at least 11% y/y to 12.5 million tonnes (some analysts are forecasting 14.0 million tonnes). This would boost supplies available for exports, and subsequently, to exert downward pressure on domestic maize prices. This would thus improve its attractiveness to maize-importing nations.
But that’s all in the future. In the 2019/20 marketing year which ends in April 2020, we expect South Africa to imports 525 000 tonnes of maize, all yellow maize, albeit being an exporter of over a million tonnes of maize in the same season. These imports will mainly be for the coastal provinces of the country. This is up from an estimated 171 622 tonnes in the 2018/19 marketing year. The country has thus far imported 452 229 tonnes of yellow maize.
In terms of wheat, as we’ve pointed out in the previous note, South Africa’s 2019/20 wheat imports could increase by 28% y/y to 1.8 million tonnes because of expected lower domestic harvest on the back of unfavourable weather conditions in the Western Cape. In the week of 31 January 2020, South Africa’s 2019/20 season amounted to 537 882 tonnes, which equates to 26% of the aforementioned seasonal import forecast.
That’s all on weekly grain trade development which will be out at midday. Later in the day, South Africa’s President, Mr Cyril Ramaphosa, delivers the State of Nation Address. This will be a most-watched event by analysts and South Africans at large.
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