I’m making it a routine to use this Monday note to reflect on the two weekly data releases in the South African agricultural market, namely (1) the grain producer deliveries and (2) trade activity. For now, the focus on the producer deliveries data is on summer grains, but that will change in the coming months when the winter crop harvest begins.
Admittedly, most people are probably not watching the producer deliveries data for summer grains closely as in the past few weeks as the harvest is virtually over and the attention is shifting towards the 2020/21 production season which commences next month. The outlook for the upcoming season is positive, with prospects of above-normal rainfall. In its Seasonal Climate Watch report which was released on 04 September 2020, the South African Weather Service noted that “the multi-model rainfall forecast for spring, late spring and early summer (Sept-Nov, Oct-Dec and Nov-Jan) indicate increased chances of above-normal rainfall over most parts of the country with the main focus being on the summer rainfall areas in the northeast of South Africa.” The northeast comprises parts of Limpopo, Mpumalanga, Free State and parts of KwaZulu-Natal provinces.
Back to the producer deliveries, the data for the week of 28 August 2020, showed that South Africa’s grain harvest activity has been delayed because of the late start of the 2019/20 season, specifically for maize which will be a primary focus in this note. Roughly 82% of the expected maize crop of 15.5 million tonnes had been delivered to commercial silos that week, and the quality of the crop is mainly good.
In terms of trade, South Africa exported 80 309 tonnes of maize in the week of 28 August 2020. About 43% of this went to Japan, 35% to Vietnam and the rest to Southern Africa markets. This placed South Africa’s total maize exports at 1.26 million tonnes, which equates to 47% of the seasonal export forecast (2.7 million tonnes). The leading markets thus far are the Southern African countries (Zimbabwe, Botswana, Mozambique, Lesotho, Eswatini and Namibia), mainly for white maize, and Japan, Taiwan, Vietnam and South Korea for yellow maize.
About 75% of all maize exports thus far is yellow maize, with 25% being white maize. As I set out in the previous blog entry, there will likely be an uptick in white maize exports towards the end of the year and into early 2021, which is when Zimbabwe’s maize stock will be low and the country will increase its import activity. We can rule out Kenya as a potential market. While Kenya will experience maize shortage towards the end of the year into early next year, South Africa is unlikely to be a country of choice for its imports because of the prohibitions on the importation of genetically modified maize, which South Africa produces roughly 80% of it.
In the case of wheat, South Africa is a net importer and brought in 9 022 tonnes from Russia in the week of 28 August 2020. This placed South Africa’s 2019/20 wheat imports at 1.61 million tonnes, which equates to 89% of the seasonal import forecast (1.80 million tonnes). The leading suppliers of wheat to South Africa in the 2019/20 marketing year include Poland, Germany, Lithuania, Russia, Ukraine and Latvia, amongst others. This marketing year ends in September 2020, which means South Africa will have to bring in an additional 193 924 tonnes of wheat within the next few weeks if we are to meet the import forecast for the season.
Best wishes for the week!
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