THE Crop Estimates Committee (CEC) fears a possible decline in the summer grains and oilseed harvest, with its first production estimate for the 2023/24 season placing the summer grains and oilseed harvest at 17.4 million tons, down 13% year on year (y/y).
Reacting to the data, released yesterday, Agricultural Business Chamber(Agbiz) chief economist Wandile Sihlobo said this was the result of a reduction in planted areas, translating to expected lower yields in some regions.
The white and yellow maize harvest could respectively be 7 million tons (down 17% y/y) and 7.3 million tons (down 8% y/y), with an overall maize production estimated at 14.3 million tons (down 13% y/y).
“The challenge for maize is the possible poor yield in some regions as the area plantings are higher than the 2022/23 season. While this expected harvest is significantly lower than the previous season, if it materialises, it would still meet South Africa's annual maize consumption of roughly 12 million tons, and the country would remain a net exporter of maize, although a much lower volume than the previous years,” Sihlobo said.
The 2023/24 soybean harvest was estimated at 2.1 million tons, down 23% y/y. This decline was attributed to moderately lower area plantings and a possible yield decline in various regions. Similarly to maize, a harvest of this size would still keep South Africa a net exporter of soybeans.
The sunflower seed harvest estimate was 671 100 tons, down 8%y/y. The area plantings were moderately up from the previous year, which meant the major concern was possibly lower yields.
The 2023/24 groundnut harvest estimate was 64 395 tons (up 22% y/y), sorghum at 110 780 toes (up 17%), and dry beans at 59 880 tons (up 19%).
Agbiz said overall, much of the crop prospects' damage occurred this month.
“The significance of February cannot be overemphasised in South Africa's agriculture. Significant summer grains such as maize, sunflower seed, and soybeans are in pollination stages this month.
“The crop should ideally have higher moisture levels during this pollination stage to boost yields. The crop has entered this growth stage with limited moisture across the major growing regions in the Free State, North West, and Mpumalanga, amongst other provinces.”
Nkhensani Mashimbyi, an agricultural economist at Absa AgriBusiness, said the CEC had indicated that yield concerns for the summer crop-growing regions were not unjustified, and forecast 2023/24 production declines of 12.6% for maize, 6.79% for sunflowers, and 22.76% for soybeans, attributed to yield losses induced by heat and sparse rainfall.
“Consequently, this has supported local maize prices at a time when global maize prices are showing a decreasing trend. White maize was forecast to decline by 17.21% because it is predominantly produced in the western parts of the country. After all, this region received below-average rainfall.
“As a result, white maize is trading at a premium of about R530 per ton to yellow maize. The maize crop is expected at 14.3 million tons, which is just 500 000 tons shy of the five-year average but still above the local demand,” Mashimbyi said.
Absa AgriBusiness said the past four seasons of bumper harvests and favourable stock levels, therefore, limited the excessive upside price risks.
“This could vary, however, amongst different localities and producers-therefore it remains pivotal to monitor production conditions as the season progresses,” Mashimbyi said.
Going forward, Mashimbyi said given the above-mentioned, the factors that the sector needed to monitor locally would be production conditions for the current season, international prices as well as the exchange rate.
“Drier and hotter production conditions and the weaker exchange rate present price support for Safex maize prices. This could be offset by lower global commodity prices and higher carry over stock,” Mashimbyi said.
Paul Makube, senior agricultural economist, FNB Commercial, said the CEC forecast was expected given the persistent dryness in the producing areas of the North West and some parts of the Free State.
He said that, meanwhile, maize futures had already responded in the past few weeks with the latest May-24 and Jul-24 white maize contracts rising by 16.3%, R629 per ton {/t) and 16.1% (+R619/t) month on month (m/m ), respectively, at R4479/t and R4471/t.
Yellow maize futures for May-24 and Jul-24 delivery had so far increased by 5.9% (+R220/t) and 5.5% (+R205/t) m/m respectively at R3,918/t and R3,905/t.
Makube said South Africa was now in the critical stage of crop growth and decent rains were required to reverse potential losses.
"Nonetheless, the El Niño weather pattern was relatively mild for South Africa as we received unusually widespread rains. Further, the good news is that the current El Niño will be a once off event as forecasts so far indicate that it is dissipating towards winter with neutral conditions taking hold into the 2024/25 crop season," Makube said.
The short-term rainfall outlook still called for showers of about 20mm to 50mm across most growing areas that could help salvage the situation.
"However, more is needed to make a meaningful recovery," Makube said.
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