Yesterday (24 July 2018), the South African Weather Service (SAWS) expressed a similar message to the International Research Institute for Climate Society about the probability of El Niño occurrence in the 2018/2019 production season, which commences in October 2018. The agency also cautioned that “it is still too early to determine the potential impact of the predicted El Niño event; however, the typical effects are drier and warmer conditions for the summer rainfall areas during summer”.
We will keep a close eye on the developments over the coming months in order to ascertain the impact of this on next season’s crop production. In the near term, this will possibly have minimal impact on maize prices until there is some level of confidence or clarity on the estimates, which should be revealed in the space of a month or two.
South Africa’s maize supplies for the 2018/2019 marketing year are in good shape, estimated at 16,7 million tons, which is well above the local demand of 10,8 million tons, according to data from the national Supply and Demand Estimates Committee. The supplies figure includes an opening stock and expected production. This could keep SAFEX maize prices under pressure in the near term.
In terms of trade, South Africa exported 75 115 tons of maize in the week ending 20 July 2018, down by 20% from levels seen in the previous week (ending 13 July 2018). About 93% was yellow maize, with 7% being white maize.
The leading buyer was again Taiwan, with a share of 74% of the weekly exports. Trailing Taiwan was Vietnam with a share of 15% of weekly exports. The rest went to regional markets. Overall, this placed South Africa’s 2018/2019 maize exports at 838 925 tons, which equates to 34% of the seasonal export forecast of 2,5 million tons. –Wandile Sihlobo
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.