The Crop Estimate Committee’s summer grain preliminary plantings data showed that the area planted to maize is 2.3 million hectares. About 1.3 million hectares of this is white maize and the remaining million hectares is yellow maize. This came as a surprise as the projection was 1.98 million hectares. The committee suspects that there were more late plantings than were anticipated following early January rainfall. While this a welcome development, it is important to stress that these are initial estimates, there could be a revision next month and our view still leans towards a possible downward adjustment.
The important question at the moment is, what size of maize crop will South Africa have in the 2018/19 production season? Estimates in the market currently vary between 10.4 and 12 million tonnes, which is plausible if one assumes the aforementioned area and average yields, but that would depend on good rainfall which is still proving to be a challenge in the western areas of the South African maize belt.
Given that South Africa’s maize consumption is about 10.8 million tons a year, a harvest of 10.4 million tons, or even one as low as 8 million tons, would still ensure sufficient supplies for the country, as there could be fairly large stocks of about 3.4 million tons at the beginning of the 2019/2020 marketing year in May this year. This is assuming minimal exports, which is yet to be seen as our neighbouring countries could experience a shortage. Essentially, the data released yesterday (30 January) does not change our food inflation outlook, of a possible moderate uptick, this year to an average of 5% despite the recent increase in maize prices (for more information on food inflation, see Consumers will feel the pinch … but not everywhere, 24 January 2019).
The other crop area that came as a surprise was the sunflower seed area plantings, at about 444 000 hectares down by 26% from the area planted in the 2017/2018 production year. Unlike the case in maize where we expected a reduced area, we had anticipated an uptick on sunflower seed after increased planting activity earlier this month. We foresee a possible upward adjustment when the committee releases its revised estimates in February. Soya bean plantings are estimated at 743 600 hectares, down by 6% from the previous season. – Wandile Sihlobo, Agbiz