South Africa is on its eighth summer grain and oilseeds production forecast for the 2023-24 season. There are two more monthly reports to follow. Given that we are at the tail end of the season and will soon be in the optimal planting window for the 2024-25 production season from mid-October, we thought there would be no major revisions of the production figures at this late stage.

But this has not been a typical season, and the lower producer deliveries we have been observing over the past few weeks are not only a function of on-farm storage but a poor harvest. Indeed, we struggled with a mid-summer drought in February and March, undermining crop yield potential in various regions.

On September 26, South Africa’s Crop Estimates Committee lowered the 2023-24 maize harvest to 12,80 million tonnes, down 2% from last month and 22% from the previous season. This sharp decline in harvest prospects signifies the harsh impact of the drought.

Of the current estimate, white maize is about 6,08 million tonnes (down 2% m/m), with yellow maize at 6,72 million tonnes (down 2% m/m). The current maize crop of 12,80 million tonnes is the lowest in six years, again showing the sharp impact of the drought.

We believe the expected harvest and carryover stocks from last season will meet South Africa’s annual maize consumption of roughly 12,00 million tonnes. This will still leave the country with a sizable volume for export markets.

The latest data from the South African Grains and Oilseed Supply and Demand Estimates Committee suggests that South Africa’s maize exports could reach 1,90 million tonnes in the 2024-25 marketing year (this corresponds with the 2023-24 production season).

In the week of September 13, about 843k tonnes had already been exported (the 2024-25 marketing year started on May 1).

In this export forecast, about 1,20 million tonnes will likely be white maize, with 700k tonnes could be yellow maize. Still, the estimated exports of 1,90 million tonnes are down notably from 3,40 million tonnes in the previous 2023-24 marketing year (this corresponds with the last 2022-23 production season). With the further downward revision of the harvest, we suspect that the export figure may have to be revised somewhat, particularly the white maize component.

Also worth noting is that while South Africa will likely remain the net exporter of maize in the 2024-25 marketing year (which corresponds with the 2023-24 production season), the coastal regions will import small volumes of yellow maize for animal feed because of price advantage. We have recently seen the imports of yellow maize from Argentina through Cape Town.

South Africa’s 2024-25 maize imports currently stand at 173k tonnes. The imports for the year (2024-25 marketing year) could rise to 350k tonnes. Brazil is another potential supplier of yellow maize to South Africa. Notably, after accounting for these potential imports, South Africa will likely remain a net maize exporter.

Importantly, these figures are still tentative. There may still be adjustments in the coming months, particularly on white maize export forecasts. We are in a tricky season with many unknowns, and the recent downward revision of white maize has further complicated an already challenging season.

The implication for the consumer is that white maize prices may remain elevated over the near term. On September 26, the white maize spot price traded around R5 505 per tonne, roughly 38% up year-on-year.

Meanwhile, yellow maize was at R4 240 per tonne, up 10% year-on-year. The price difference is because of the abundant yellow maize supplies in the world market relative to scarce white maize.

The regional demand for white maize will also continue to present upward price pressures, especially towards the end of the year and going into the first few months of 2025.


Follow me on X (@WandileSihlobo). 

Pin It on Pinterest

Shares
Share This