Dr Frikkie Maré, academic head of the Department of Agricultural Economics at the University of the Free State (UFS), provides a monthly market overview of the previous month’s agricultural markets. This is the overview for April 2020.
The price of yellow maize increased during April and closed at R2 538/ton.
The rand strengthened against the major currencies before losing ground again. At the end of the month the rand traded at R18,66 against the dollar and R20,44 against the euro.
Consumer price inflation (CPI) decreased slightly to 4,5% during March, while the producer price inflation (PPI) was not released due to the resulting lockdown caused by COVID-19. The prime lending rate decreased to 7,75% due to the negative impact of COVID-19 on the economy.
The bad news is that the economic growth during the last quarter of 2019, as represented by the gross domestic product (GDP), has shrunk to -0,5% on a year-on-year basis. The economy also shrunk by 1,4% on a quarter-on-quarter basis. With two consecutive quarters of economic shrinkage, South Africa has now slumped into a recession.
Red meat market
During April, the market price of lamb and sheep carcasses decreased slightly but, overall, did not hold a candle to the price decrease of beef carcasses. The last available prices for beef carcasses in April were R43,69/kg for A2, R36,94/kg for B2 and R37,05/kg for C2. The last available prices for A2, B2 and C2 lamb and sheep carcasses were R72,74/kg, R52,86/kg and R51,48/kg, respectively.
In terms of weaner animals, the last available prices were 25,76/kg for weaner calves and R31,33/kg for weaner lambs. The price of hides and Merino and Dorper skins moved sideways.
Wool and mohair market
As a result of the national lockdown, both wool and mohair auctions were prohibited for the better part of April. Only one wool auction took place. The indicator price of clean wool strengthened during April and traded 6,3% higher compared to the previous auction, but 33,9% lower than a year ago. Seeing as there were no mohair auctions, the March prices remain the last available prices.
The producer price index of milk, eggs and dairy products increased during March. The consumer price index data was not released and therefore the last available data released in February remains valid.
Click here to read the March 2020 market overview. – Dr Frikkie Maré, University of the Free State