Our recent interaction with winter wheat farmers in various parts of the country has been encouraging. In the major producing province, Western Cape, the crop has matured and is generally in good shape with expectations of good yields in most regions – all thanks to rainfall received in the past couple of weeks.
The rainfall in the province did not only improve crop conditions, but boosted dam levels as well. The most recent data from the Department of Water and Sanitation shows that the Western Cape provincial dam levels averaged 66% in the week of 01 October 2018, up by a percentage point from the previous week (ending 24 September 2018) and 30 percentage points from the corresponding period last year (2017).
The crop growing conditions are also favourable in provinces such as the Northern Cape, Free State, Eastern Cape and Limpopo, amongst others, albeit at relatively early stages of development compared to the Western Cape due to a difference in planting periods. The crop in these particular provinces is supported by recent showers and improved water levels in the dams for irrigation, following good summer rainfall.
Worth noting is that the week ending 19 October 2018 promises rainfall in most regions of the aforementioned provinces, which could further improve soil moisture and subsequently benefit the crop conditions. This is all supportive of the Crop Estimates Committee’s view of a potential 18% annual increase in South Africa’s wheat production to 1,85 million tons.
To reiterate a point made in our previous notes, the potential uptick in domestic wheat production could lead to a 33% decline in imports to 1,4 million tons of wheat in the 2018/2019 marketing year which commenced this week (ending 5 October 2018). –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.