This note is a bit delayed. I had to attend a conference this morning. Here is a Twitter feed for those keen to see what went down.
Back to business!
It is Thursday – a grain trade day. The South African Grain Information Services (SAGIS) releases the country’s grain trade data for the week of 14th of February 2020 at midday. The data covers grain and wheat. To reiterate a point I made last week, although grain trade data are important for tracking the movement of commodities 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 receive the numbers from SAGIS, the key grain market players are probably aware of the levels of sales.
South Africa is a net exporter of maize. In the week of 7th February 2020, South Africa’s 2019/20 marketing year maize exports amounted to 976 279 tonnes (both white and yellow maize). This equates to 74% of the export forecast for this season (compared to 71% the previous week), 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.
Nonetheless, that’s all in the future. In the 2019/20 marketing year which ends in April 2020, we expect South Africa to import 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 463 859 tonnes of yellow maize. The key suppliers are Brazil and Argentina.
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 7th February 2020, South Africa’s 2019/20 season amounted to 537 812 tonnes, which equates to 26% of the aforementioned seasonal import forecast.
Aside from the grain trade data, it’s a quiet day in South Africa’s agricultural market with no major data releases. Those in Gauteng province of South Africa gather today at Africa Agri Tech conference in Pretoria – an opportunity to listen to industry leaders and hear about on-farm technological developments.
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