Wandile Sihlobo, Agbiz

While the soya bean harvest process has been completed, farmers continue to deliver the crop to commercial silos. In the week ending 10 August 2018, approximately 1 503 tons of soya beans was delivered to commercial silos, up by 18% from the previous week (ending 3 August 2018). The yields in most areas varied between average and above-average, which is in line with market expectations.

This placed South Africa’s 2018/2019 marketing year soya bean producer deliveries at 1,46 million tons, which equates to 94% of the expected harvest of 1,55 million tons. An additional volume could be delivered over the coming weeks as forecast weather conditions are quite favourable for logistics from farms to silos, with the exception of the last week (ending 31 August 2018) of this month, when light showers could occur in most parts of the country.

The volume of soya beans delivered thus far has boosted domestic soya bean stocks, which were estimated at 1,40 million tons in June 2018, up by 2% from the previous month (May) and 37% from the corresponding period last year (2017).

To reiterate a point made in previous notes, the general expectations of a large harvest this season could lead to a decline in imports as the country is increasingly becoming reliant on domestic produce. We estimate that South Africa’s soya bean and oilcake imports could decline by 64% and 17% year-on-year in the 2018/2019 marketing year to 10 000 tons and 458 992 tons, respectively.

One of the countries that were a key suppliers of soya beans to South Africa in the 2017/2018 marketing year is Zambia. However, this time around, the country might not be in a position to export large volumes of soya beans to South Africa due to the expectation of a lower harvest. The United States Department of Agriculture (USDA) forecast Zambia’s soya bean production at 300 000 tons, down by 15% from the 2016/2017 production season. Most importantly, this is well below the country’s annual soya bean consumption of 328 000 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.

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