In terms of weather outlook, the South African Weather Service seems to be singing from the same hymn book as the International Research Institute for Climate Change Society. Yesterday (28 May 2018), the local weather agency indicated a possibility of above-normal rainfall in winter crop growing areas between June and September 2018.
The expected higher rainfall is precisely what is needed in the Western Cape in order to sufficiently improve soil moisture and benefit the new season crop. The dam levels could also improve. In the week of 21 May 2018, the dams averaged 17% , down by 2 percentage points from the same period last year (2017).
Be that as it may, the near-term forecasts paint a mixed picture. The areas around the West Coast, Swartland, Helderberg, Overberg and the Garden Route regions of the Western Cape could receive light showers during the next eight days which should benefit the newly planted crop. The forecast for the week ending 8 June 2018 shows clear skies over most regions of the province.
The Western Cape is of importance due to its share contribution to South Africa’s wheat production. The province accounts for 64% of South Africa’s intended 500 500 hectares for winter wheat in the 2018/2019 production season. We will get clarity about this season’s harvest when the National Crop Estimates Committee releases its first production estimate for winter crops at the end of August 2018.
Apart from the production dynamics, the wheat import tariff rate of R437.24 per ton that triggered on 10 April 2018 was finally published in the Government Gazette on 25 May 2018, making it an official rate. This is a 45% increase from the previous rate. The delays and uncertainty of wheat tariff adjustments partly resulted in a decline in imports during the past couple of weeks, but this could soon change as all triggered tariffs have now been gazetted. – Wandile Sihlobo, Agbiz
Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in his update on agricultural commodity markets. Click here for the full report on agri markets for the major commodities.