The rainfall of the past couple of months in the Western Cape and generally improved moisture levels in other winter crop growing areas of South Africa has led to the further upward revision of the harvest estimate.

South Africa’s Crop Estimates Committee lifted wheat, barley, canola and oats production by 5%, 1%, 9% and 6%, respectively from September 2020 to 2.13 million tonnes, 526 706 tonnes, 137 356 tonnes and 47 400 tonnes. These will be the largest harvests on record for barley, canola and oats, while for wheat it will be the largest harvest in 19 years.

Nevertheless, the increase in production will have minimal impact on commodity prices, specifically wheat, of which South Africa is a net importer. And thus, wheat prices largely depend on developments in the global market, along with domestic currency movements.

Having said that, while South Africa will remain a net importer, the volume will fall notably compared to the previous year. The most recent estimates from the South African Grain and Oilseeds Supply and Demand Estimates Committee suggest that wheat imports could fall by 18% y/y to 1.54 million tonnes, which bodes well for agricultural trade balance. Meanwhile, the recovery in barley production will see South Africa being a net exporter. Canola and oats will mainly be for domestic consumption.

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Exhibit 1: Winter crop production
Source: Crop Estimates Committee and Agbiz Research

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