Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in his update on agricultural commodity markets.

SA to remain a net exporter of maize in 2018/2019

There is generally some optimism in the South African maize market following good rainfall in the past few weeks. Yesterday (10 April 2018), the United States Department of Agriculture (USDA) lifted its estimate for South Africa’s 2017/2018 maize production by 200 000 tons from last month to 13.2 million tons. This is on the back of expected higher yields in some parts of the country. With that said, this is still well below the record level of 17.5 million tons achieved in the 2016/2017 production season.

It is worth noting that the USDA’s data covers both commercial and non-commercial production, hence the numbers differ from those of the National Crop Estimates Committee’s (CEC) which mainly focuses on commercial production. Non-commercial production, which is mainly subsistence farming, accounts for a 6% share in the estimated harvest of 13.2 million tons. Therefore, the USDA’s commercial maize production estimate is almost at par with the CEC’s estimate of 12.42 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 which starts on 1 May 2018. This marketing year will open with a large carryover stock of about 4.1 million tons, which will add to the expected large harvest noted above. As a result, South Africa could remain a net exporter of maize in the 2018/2019 marketing year. The current estimates suggest that exports could reach 2.2 million tons (see chart below), slightly below the 2017/2018 marketing year’s exports of about 2.5 million tons. This suggests that the SAFEX maize prices could remain at fairly lower levels for some time, all else being equal.

In that same vein, last week (ending 6 April 2018), South Africa exported 56 594 tons of maize, well above the previous week’s (ending 30 March 2018) exports of 11 820 tons. About 95% of the exported volume was white maize, with the remainder being yellow maize.  The leading buyer was Spain with a share of 79% of all exports. The last time Spain bought a notable volume of maize from South Africa was in the 2010/2011 marketing year, which amounted to 26 039 tons. This placed South Africa’s 2017/2018 maize marketing year exports at 2.1 million tons, which equates to 84% of the season’s export forecast of 2.5 million tons.

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Find previous reports here.