Last week (ending 13 July 2018), the United States Department of Agriculture (USDA) lifted its estimate for South Africa’s 2017/2018 maize production by 2% from last month (June) to 13,8 million tons. While production of 12,5 million tons is above average, this is lower than the previous season’s record harvest of 17,6 million tons due to a decline in area planted and expectations of average yields in some areas.
This is in line with the local Crop Estimates Committee’s estimate for overall production (commercial and non-commercial). The non-commercial production, which is subsistence farming, accounts for a 4% share in the estimated harvest of 13,8 million tons.
The key message from these numbers is that South Africa’s maize market will be well supplied in the 2018/2019 marketing year. The total maize supplies could reach 16,7 million tons, 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 essentially means that South Africa’s 2018/2019 marketing year maize exports could, at least, amount to 2,5 million tons, slightly lower than the volume exported in 2017/2018. Most importantly, this suggests that the SAFEX maize prices could remain at relatively lower levels for some time, all else being equal.
On the ground, the harvest process is gaining ground, albeit having started late this year due to delayed planting earlier in the season. Total maize deliveries for the first ten weeks of the 2018/2019 marketing year are estimated at 5,1 million tons, which equates to 39% of the estimated commercial harvest of 13,2 million tons. – 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.