Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in his update on agricultural commodity markets.
The expected cool and dry weather conditions across the South African maize belt during the next eight days could add momentum to the planting activity, particularly in the eastern parts of the country. In this area, the optimal planting window closes around mid-November.
From a trade perspective, South Africa’s maize exports recovered from the disappointing activity observed in the week ending 20 October 2017. Last week (ending 27 October 2017), the country exported 63 326 tonnes of maize. About 89% of these exports were yellow maize, with 11% being white maize.
The leading buyer was South Korea with a share of 84%, all yellow maize. Trailing South Korea was Botswana with a share of 6%, largely white maize. This placed South Africa’s 2017/2018 total maize export volume at 1.5 million tonnes, which equates to 68% of the season’s export forecast of 2.2 million tonnes. About 66% of the exported 1.4 million tonnes is yellow maize, with 34% being white maize.
Malawi has lifted its maize export ban following an uptick in domestic maize production. The country’s 2017/2018 maize supplies are estimated at 3.2 million tonnes, up by 33% from the previous season.
The expected rainfall might slow the harvest process in areas that have already started, particularly in the southern Cape and Swartland regions. The areas that planted late in the season could still benefit from rainfall as crops are at grain filling stages of development.
In terms of dam levels, the recent update for the week ending 30 October 2017 shows that dams averaged 37% in the Western Cape, unchanged from the previous week, but 23 points lower than the same period last year. The expected rainfall this week might improve water levels slightly.
From a trade perspective, South Africa imported 63 087 tonnes of wheat in the week ending 27 October 2017 – 56% from Ukraine and the balance from Russia, Romania and the United States. This is 51% lower than the volume imported last week. Overall, the 2017/2018 marketing season’s wheat imports stand at 311 235 tonnes. This equates to 17% of the seasonal import forecast of 1.8 million tonnes.
Although a net importer of wheat, South Africa continues to export wheat to regional markets. The third batch of exports this season went to Namibia, totalling 176 tonnes. This placed the total exports for the 2017/2018 season at 1 581 tonnes. There are likely to be more exports to regional markets over the coming months.
The weather forecast has cleared up across the northern parts of the country, with the exception of the coastal areas and the Western Cape. This will present a breathing gap so that farmers can continue with planting activity. The soya bean optimal planting window will only close in December.
South Africa has large soya bean supplies of 1.40 million tonnes in the 2017/2018 marketing season . This figure includes an opening stock of 84 792 tonnes, commercial deliveries of 1.28 million tonnes and a small volume of imports. Overall, this is 27% higher than the previous season’s supplies due to large deliveries.
The 2017/2018 marketing season’s total soya bean demand is projected at 1.14 million tonnes, up by 15% from the previous season. This includes 930 000 tonnes of soya bean for crush for oil and meal (oil cake), with the remainder set to be utilised in other products.
This also includes a 30 000 tonnes for export markets, which is well above the 2016/2017 season’s exports of 6 745 tonnes. There were no soya bean exports in September 2017. The last exports were in August 2017, a volume of 99 tonnes of soya bean, all to Mozambique. In total, South Africa’s 2016/2017 soya bean total exports currently stand at 411 tonnes.
With the optimal planting window opening this week (ending 3 November 2017), the expected cool and dry weather conditions during the next eight days across the northern parts of the country could add momentum to planting activity.
South Africa has large sunflower seed supplies, thanks to good summer rainfall within the 2016/2017 production season. The country’s Supply and Demand Estimates Committee forecasts sunflower seed supplies for the 2017/2018 marketing season at 1.05 million tonnes. This includes an opening stock of 163 086 tonnes for this season, commercial deliveries of 874 595 million tonnes and a small volume of imports. Overall, this is 18% higher than the previous season.
Total demand is projected at 818 700 tonnes, up by 14% from the previous season. This includes 800 000 tonnes of sunflower seed for crush for oil and meal (oil cake), with the remainder set to be utilised in other products.
This also includes 300 tonnes for the export market, which is well above the 2016/2017 season’s exports of 205 tonnes. So far, the country has only exported 128 tonnes of sunflower seed to regional markets.
The South African potato market had a good run in yesterday’s (31 October 2017) trade session with the price up by 9% from the previous day (30 October 2017), closing at R39.19 per pocket (10kg). This was due to lower stocks of 804 965 pockets (10kg) at the beginning of the trading session.
However, during the session, the market saw an uptick in deliveries as harvest activity picks up after a quiet weekend. This subsequently led to a 4% increase in daily stocks to 839 907 pockets (10kg).
The fruit market remained mixed in yesterday’s (31 October 2017) trade session. The prices of apples and bananas were up by 5% and 13% from the previous day (30 October 2017), closing at R7.27 and R7.46 per kilogramme, respectively. This followed a 15% and 16% decline in stocks of apples and bananas to 247 556 tonnes and 237 934 tonnes, respectively.
The oranges market lost 9% from the previous day, closing at R5.92 per kilogramme due to strong commercial selling. The orange price could soon recover owing to lower stocks of 76 071 tonnes.