Mzansi Agriculture Talk

Agriculture

Grains bumper harvest; surplus recorded

The crop season figures have excitedly dazzled market commentators considering South Africa will have two months (66 days) of maize stock of available.

According to the Supply and Demand Estimates Committee (S&DEC) projections for grains and oilseeds for August 2020, “the total supply of maize is projected at 15 942 839 tons for the 2020/21 marketing season. This includes an opening stock (at 1 May 2020) of 1 000 601 tons and local commercial deliveries of 14 926 970 tons.”

Due to the bumper crop season, it could not estimate on the whole maize imports expected, but there were early deliveries of negative 12 732 tons and a surplus of 28 000 tons estimated.

According to Agricultural Business Chamber (AgBiz) chief economist, Wandile Sihlobo, the total maize of production was the second largest harvest on record, still at 15.5 million tonnes (up 38% year on year).

“The data released by the CEC showed that South Africa’s 2020/21 wheat, barley and canola production could increase by 28% y/y, 46% y/y and 29%, respectively, to 1.96 million tonnes, 505 215 tonnes and 122 820 tonnes. Admittedly, these are still preliminary data and the weather conditions in September will matter more on determining if the forecast harvest will materialize.”

By global grains outlook, South Africa’s overall production for grains in 2020 was forecast at 18.3 million tons, which was 30% higher than the five-year average.

The National Agricultural Marketing Council (NAMC) market access indicator report, said production was forecast at an average level of 1.65 million tons in 2020 boding well for maize surplus.

“This development has encouraged farmers to sow more than the initial intentions, lessening the year on year (y-o-y) decline in plantings. Maize exports are expected to be above average level of 2.5 million tons in the 2020/21 marketing season (May/April), more than 1 million tons above previous year” it said.

For the past 10 years, South Africa imported on average about 51% per annum of its consumption.

Sihlobo concurred that the expected improvement could boost South Africa’s agricultural trade balance especially after the 200 000 tonnes decline in imports.

“Zimbabwe is foreseen to be one of the main destinations after lifting bans against GMO’s, mainly produced in SA. The bulk of yellow maize exports are expected to be shipped to East Asia, mainly to the Republic of Korea, Japan and Taiwan, which have already collectively imported nearly 0.5 million tons of yellow maize since May 2020” said the NAMC.

The S&DEC projected export quantity of 390 000 tons of processed products and 2 150 000 tons of total whole maize is estimated for exports for the 2020/21 marketing season.

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