Uncertainty lingers on wheat stockpiles
Widespread reports by industry players in the Western Cape, say that the province’s wheat stockpiles are diminishing.
According to the National Agricultural Marketing Council (NAMC), the estimated current wheat stockpiles available in the country was at 15.2 million tonnes compared to the local demand at around 114 million tonnes.
This meant that South Africa’s wheat stock was already below 20-30% from the previous season.
ABSA Grain and Oilseeds report also reported that prices in the domestic wheat market traded higher last week.
“The uncertainty of major wheat exporting countries possibly restricting exports will have a negative effect on our economy” it said.
In lay man’s term, South Africa needed to import more wheat than already planned in order to supplement local demand. Already, there were escalated fears that the shortage of wheat would likely increase wheat product prices in the coming weeks.
“The country is still 6-7 months away from harvesting new crop, therefore local wheat prices follow international wheat price swings. Local wheat prices are expected trade sideways from April to June” said ABSA.
Other wheat exporting nations were also expected to follow suit in restricting exports.
“Due to COVID-19, this might result in a slowdown or disruption of the supply of food chains” said the NAMC.
SA is a net importer of wheat with leading supplies coming from Germany, Lithuania, Poland, Latvia, Ukraine and Russia.
The Agricultural Business Chamber (AgBiz) was, on the other hand, optimistic of SA’s wheat stockpile. It said close to 3 450 tonnes of wheat were delivered to commercial silos.
“As of 10 April 2020, South Africa had imported 764 783 tonnes of wheat, which equates to 42%
of the volume of the country intends to bring into its shores within the 2019/20 season” said its Chief Economist Wandile Sihlobo.
The NAMC concurred with AgBiz that South Africa’s supply of grain products was still sufficient, however the oilseeds still delivered small volumes at below 90 000 tonnes.
