Economists are keeping a keen eye on South Africa’s upcoming 2022/23 summer crop season. The Crop Estimates Committee (CEC) announced that it has increased the country’s estimates for maize production during the 2021/22 season by 2% from July this year, bringing the total to 15.0 million tonnes.
According to agricultural economist Wandile Sihlobo, a harvest of 15,0 million tonnes is down by 8% from 2020/21’s seasonal crop, but still above the 10-year average maize harvest of 12,80 million tonnes. The country’s annual domestic consumption currently lies at 11,80 million tonnes.
“And thus, this implies that South Africa will remain a net exporter of maize, which we anticipate to be about 3,0 million tonnes in the 2022/23 marketing season,” Sihlobo adds. “On 19 August 2022, about 12,0 million tonnes of the expected 15,0 million tonnes harvest had already been delivered to commercial silos. We expect further deliveries to continue in the coming weeks. The weather is favourable, with clear skies over South Africa over the next two weeks.”
Soybean harvests to decrease reliance on imports
“Another significant and most welcome adjustment in the data was the 1% increase in South Africa’s soybeans harvest from July, estimated to a new record of 2,2 million tonnes. This large soybean harvest will help lessen South Africa’s reliance on soybean oilcake imports. On 19 August 2022, about 95% million tonnes had already been delivered to commercial silos. We could see further deliveries in the coming weeks,” Sihlobo says.
However, sunflower seed estimations have lowered for the third consecutive month. It has dropped 5% from July estimates, to 876 050 tonnes. According to Sihlobo, this is South Africa’s third largest sunflower harvest on record. Economists suspect that a further drop may still be coming, as the past few weeks of producer deliveries have steadily been decreasing.
A total of 94% of the expected harvest was delivered by 19 August 2022.
“Aside from these major summer crops, the sorghum harvest is estimated at 123 700 (-9% m/m), dry beans harvest at 52 590 tonnes (+2% m/m), and groundnuts are at 49 000 tonnes (unchanged from last month),” says Sihlobo.
How international factors impact local harvests
This domestic production data will have little effect on pricing, the economist assures consumers. Prices for domestic grains and oilseeds are mostly influenced by events abroad and changes in exchange rates. Following Russia’s invasion of Ukraine, agricultural prices around the world began to decline. Additionally, although little, the restart of grain exports from Ukraine has marginally increased downward pressure on world agricultural prices. However, given the ongoing market concerns, grain prices are unlikely to reach their pre-war levels.
” For example, we still see the lingering effects of the disruptions caused by the war on grain supply chains and markets. Additionally, the concerns about the impact of the drought in the Northern Hemisphere on the 2022/23 global grains and oilseed harvest, along with continued demand for grains in Asian markets, remain critical factors in sustaining prices are relatively higher levels than in the pre-war period,” Sihlobo explains.
“These developments for South Africa imply that farmers who manage to get good yields will be in a somewhat better financial position. Meanwhile, the grain users – consumers and the livestock and poultry industries – will likely experience increased costs over the foreseeable future (although better than level we saw during the first half of the year).”
The impacts of foot-and-mouth disease, which have resulted in a prohibition on the domestic movement of cattle as well as exports to various markets, have added financial strain to the livestock business, which is already dealing with increasing feed costs.
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