Afgri, which handles about 31 percent of South Africa’s grain, yesterday said that this year’s summer harvest of maize and oilseeds was likely to be “above-average” after last season’s bumper crop.

“The recent rains and the improvement in international prices on the back of low international stocks have restored a level of optimism to the sector,” the company said.

“Excessive rain in South Africa has caused very little damage thus far.”

While farmers took a cautious approach to the season after last year’s bumper harvest, the total area planted was expected to be comparable as farmers substitute maize with soya beans and sunflowers, according to Afgri.

However, South Africa might produce the smallest maize crop in four years this season, the Crop Estimates Committee said last week, citing lower prices.

The crop might decline 14 percent to 11.04 million tons, from 12.82 million tons reaped last year, it said. The sunflower seed harvest could be 65 percent bigger at 808 420 tons and farmers might produce 729 050 tons of soya beans, 29 percent more than last year, it said.

White maize for July delivery, the most active contact on the SA Futures Exchange, dropped 1 percent to R1 636 a ton yesterday.

Yellow maize for delivery in the same month declined 0.7 percent to R1 690 a ton.

Afgri expected the price of white maize to set at R1 400 to R1 800 a ton over the next few months, according to chief executive Chris Venter. He expected yellow maize prices on the SA Futures Exchange to reach R1 500 to R1 900 a ton.

Soya beans for May delivery rose 0.5 percent to R3 462 a ton, while sunflower seeds for delivery in the same month increased 1.1 percent to close at R4 240 a ton.

Afgri said headline earnings per share from its operations dropped 1.3 percent in the six months to December.

Afgri shares dropped 1.6 percent to close at R7.05 on the JSE yesterday. – Bloomberg