South Africa's Crop Estimates Committee (CEC) again lowered the 2023-24 summer grain and oilseeds production estimate by 2% from last month to 15.45 million tons.
The major downward revision was in maize, sunflower seed, and groundnut harvest. The 2023-24 summer grain and oilseeds harvest was now down 23% from the previous season.
Wandile Sihlobo, chief economist at the Agricultural Business Chamber (Agbiz), said the implication for the consumer was 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,” Sihlobo said.
Maize, which is SA’s major staple, the 2023-24 harvest is now estimated at 12,80 million tons, down 2% from last month and 22% from the previous season. Agbiz said this sharp decline in harvest prospects signified the harsh impact of the drought. Of the current estimate, white maize was about 6.08 million tons (down 2% m/m), with yellow maize at 6.72 million tons (down 2% m/m). The current maize crop of 12.80 million tons was the lowest in six years, again showing the sharp impact of the drought.
The organisation said it believed the expected harvest and carry-over stocks from last season would meet South Africa's annual maize consumption of roughly 12.00 million tons. “This will still leave the country with a sizeable volume for export markets. The data from the South African Grains and Oilseed Supply and Demand Estimates Committee suggests that South Africa's maize exports could reach 1.85 million tons in the 2024-25 marketing year (this corresponds with the 2023-24 production season). In the week of September 13, about 843k tons had already been exported (the 2024-25 marketing year started on May 1).”
Unlike other crops, South Africa's 2023-24 soybean harvest was up 2% from last month to 1.8 million tons (down 35% y/y). This annual decline resulted from lower yields in various regions of South Africa.
Sihlobo said they believed South Africa may not play a robust position in soybean exports like the previous season. If anything, soybean oil cake imports this new season were now a possibility.
Regarding the sunflower seed, the harvest estimate was down 2% from last month at 635 750 tons (down 12% y/y). This was on the back of poor yields and reduced area plantings.
The 2023-24 groundnut harvest estimate was 51 745 tons (down 2% y/y), sorghum was at 95 830 tons (up 2%), and dry beans were at 50 495 tons (up 0.4%).
In the National Agricultural Marketing Council’s (Namc) Market Intelligence Report Quarter 2-2024 also released on Thursday, the government agency’s Thulani Ningi, Naledi Radebe, Matume Maila, and Thabile Nkunjana said investments in staple crops per country were increasingly becoming important with time. “This is primarily because rising food prices due to climate change are jeopardising the progress countries have made in achieving food security over time.”
Namc added that the grain and oilseed sectors have benefited from South Africa's avoidance of commodity interventions. It said that however, given the current state of the economy and the increased expenditure by the state to pay down its debt, more money would need to be invested in making food more reasonably priced, with price controls by the state acting as a last resort. “To unlock growth in South Africa's grains and oilseeds sectors, particularly for maize, wheat, and sunflower, several key areas need focus. On the pricing front, domestic maize prices have surged, which provides short-term market gains but also highlights the need for strategies that stabilise pricing through better post harvest management and market interventions. Input cost management, particularly for fertilisers and seeds, remains critical for ensuring profitability.”
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