Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in his update on agricultural commodity markets.
South Africa’s maize exports continue to escalate. The country exported 64 356 tonnes of maize during the week ending 16 June 2017. About 56% of this was white maize and 44% was yellow maize. South Africa’s 2017/2018 maize exports currently stand at 213 963 tonnes.
Kenya was the leading buyer of South African maize during the week ending 16 June 2016, making up a share of 47% of total weekly exports (64 356 tonnes). Trailing behind Kenya was South Korea with a share of 39%. However, the Kenyan exports are unlikely to continue at higher volumes due to existing restrictions on the importation of genetically modified maize (GM) in that particular market. Over 80% of South Africa’s maize is GM.
Media reports from Zimbabwe suggest that the country could soon be looking for export markets due to large supply this season. We are hesitant about this, given that the official total maize production is estimated at 2.1 million tonnes, which is below the annual consumption of 2.2 million tonnes. Private analysts forecast the country’s maize production at 1.8 million tonnes, which is 16% below the government forecast of 2.1 million tonnes. Zimbabwe could import roughly 400 000 tonnes later in the year or early next year.
Recent weather updates suggest that fears of another El Niño have eased. The recent data from the Australian Bureau of Meteorology shows that the next summer season could be neutral and therefore no drought is forecast as previously feared.
The weather forecast for the week ending 06 July 2017 shows that the Western Cape could receive widespread light showers, which could benefit the new season crop. Planting in the province is virtually over, with incoming evidence suggesting that plantings could reach the intended area of 325 000 hectares within the province.
From a trade perspective, the week ending 16 June 2017 was a quiet one, with no imports reported. The last imports were during the week ending 2 June 2017, coming in at 32 772 tonnes, all from Germany. This brought South Africa’s 2016/2017 total wheat imports to 558 935 tonnes, which is 37% of the seasonal import forecast of 1.5 million tonnes.
Although a net importer of wheat, South Africa continues to export wheat to regional markets. The total exports reached 1 137 tonnes during the week ending 16 June 2017, all to regional markets. South Africa’s 2016/2017 total wheat exports currently stand at 85 407 tonnes. About 26% of this went to Zimbabwe, 21% to Lesotho, 20% to Botswana, 18% to Zambia, 8% to Namibia, 4% to Mozambique and 3% to Swaziland.
Harvesting is virtually over across the country’s soya bean growing areas, with the exception of areas planted late in the season. The activity (harvest) in these particular areas could gain momentum within the next two weeks due to forecast drier and warm weather conditions.
The areas that have harvested received excellent yields, which support the National Crop Estimate Committee’s view of a possible record crop.
In global markets this morning, the Chicago soya bean price was down by 0.64% from levels seen at midday yesterday (20 June 2017), owing to increasing supplies in South America.
The weather remains a key focus in the US soya bean market. The forecast drier weather conditions across the northern and western parts of the US Midwest could strain the recently emerged crop. The recent data from the United States Department of Agriculture (USDA) shows that at the beginning of this week (19 June 2017), about 89% of the US new season soya bean crop had already emerged.
Weather forecasts for the Black Sea region remain favourable. There could be widespread showers this week which bode well for the new season crop. Russia’s 2017/2018 soya bean acreage is complete on 2.3 million hectares, up by 27% from the previous season. Ukraine’s 2017/2018 soya bean acreage is estimated at 1.88 million hectares, up by 1% from the previous season.
The South African potatoes market saw substantial gains during yesterday’s (20 June 2017) trade session, with the price up 17% from the previous day (19 June 2017), closing at R28.96 per bag (10 kg). This was mainly on the back of relatively lower stocks of 960 131 bags (10kg) at the start of the session.
The market saw a further decline in deliveries throughout the session due to slow harvest activity and strong buying interest. This subsequently led to an 8% reduction in stocks by the end of the session to 881 917 bags (10 kg).
The fruit market was mixed once again during yesterday’s (20 June 2017) trade session. The banana market gained 9% from the previous day (19 June 2017), closing at R6.00 per kilogramme. This came after a 36% decline in daily stocks to 159 384 tonnes.
The apple price saw extended losses of 5% from the previous day (19 June 2017), closing at R6.16 per kilogramme due to large stocks of 236 421 tonnes. The orange price was down by 3% from the previous day, closing at R2.11 per kilogramme. This was also on the back of large stocks of 395 885 tonnes, which is well above the previous day’s levels of 344 773 tonnes.