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

SA to remain a net importer of soya beans in 2018/2019

Our recent interactions with farmers in some soya bean growing areas support the National Crop Estimates Committee’s (CEC) view of a possible record crop of 1.39 million tons in the 2017/2018 production season. Yield expectation varies across the country, mainly ranging from average and above average yields.

The CEC’s yield estimate is 1.77 tons per hectares, which is 23% lower than the previous season. With that said, this is slightly higher than the average yield of the past five production season (1.75 tons per hectare). Above all, the expected large harvest is boosted by both an increase in area planted, as well as expected higher yields (see Chart below).

Although this is a notable improvement, from levels of just a half a million tons in the 2009/2010 production season, it will not satisfy South Africa’s consumption levels. The country will remain a net importer of soya beans, estimated at 20 000 tons. This, of course, is an improvement from higher levels of 27 508 tons in 2017/2018 and 271 098 tons in the 2016/2017 marketing year.

All soya beans imported in the 2017/2018 marketing year originated from African countries, namely Zambia, Zimbabwe, Malawi and Ethiopia. Underpinning this is a solid demand from the soya bean crushing plants, which in turn is driven by growing demand from the animal feed industry.

Almost all the aforementioned countries had a bad start to the 2017/2018 production season, characterised by warm and drier weather conditions, as well as fall armyworm infestations in the case of Zambia. Therefore, it is unclear if they will still dominate the South African soya bean market this year. We could perhaps see a return of South American countries such as Paraguay or Brazil, which are currently expecting a fairly large harvest. More will unfold over the coming months.

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