Independent Online

Sunday, August 14, 2022

Like us on FacebookFollow us on TwitterView weather by locationView market indicators

SA farmers cut plantings less amid floods than previously thought

A FARMER inspects the soil ahead of planting at a maize field in this file photo. AgriSA’s agricultural economist Kulani Siweya said from a domestic point of view, there was little to nothing that suggested that South Africa would need to import grains because of a shortage.

A FARMER inspects the soil ahead of planting at a maize field in this file photo. AgriSA’s agricultural economist Kulani Siweya said from a domestic point of view, there was little to nothing that suggested that South Africa would need to import grains because of a shortage.

Published Jan 28, 2022

Share

WHILE many farmers were unable to plant crops and some planted areas were damaged by recent floods, the decrease reported by the Crop Estimates Committee (CEC) yesterday was smaller-than-initially expected – good news for the agricultural sector.

Absa Agribusiness senior agricultural economist Dr Marlene Louw said yesterday that these figures did not yet fully account for the effect of rain and cooler temperatures on yield.

Story continues below Advertisement

“With yields and grading also expected to be negatively affected by the rain, we expect that total production for the current season will amount to around 12.5 million tons. Against this background, and considering high stock levels from previous seasons, prices are likely to remain close to or at export parity levels,” Louw said.

Agricultural Business Chamber (Agbiz) chief economist Wandile Sihlobo said they doubted that the planting information would have a notable impact on the domestic grains and oilseeds prices. The grain market participants would now focus on possible yields and weather conditions as this would be more evident over time.

“The domestic grains and oilseeds market is still primarily influenced by global events such as crop conditions in South America, a significant producer in the global market, grains and oilseed demand in China, and most recently, the geopolitics in the Black Sea region. All these global factors present a temporary upside pressure on prices,” Sihlobo said.

Story continues below Advertisement

“With that said, the global production estimates remain relatively robust, which signals that the medium-term price trend of global grains could be sideways, which could be a reality here in South Africa. The International Grains Council and the United States Department of Agriculture forecast 2021/22 global maize production forecast at 1.2 billion tons, up by 7 percent year-on-year (y/y). Subsequently, the 2021/22 global maize stocks at 287 million tons, up by 3 percent y/y. This bodes well for a sideways to slight downward price trend over the coming months.”

AgriSA’s agricultural economist Kulani Siweya said from a domestic point of view, there was little to nothing that suggested that South Africa would need to import grains because of a shortage.

“This means there is a lower risk to the food inflation outlook based on domestic factors, albeit we may see global dynamics being the main driver as we have seen since the latter parts of 2020,” Siweya said.

Story continues below Advertisement

In summer crops, the preliminary area estimate for maize was 2610 million hectares (m ha), which is 5.29 percent, or 145 700 ha, less than the 2 755 m ha planted for the previous season, and also 4.24 percent, or 115 500 ha, less than the intentions to plant figure of 2 725 m ha released in October.

The preliminary area estimate for white maize was 1 576m ha, which represents a decrease of 6.87 percent, or 116 200 ha, compared to the 1 692m ha planted last season. In the case of yellow maize the area estimate was 1 034m ha, which is 2.77 percent, or 29 500 ha, less than the 1 064 m ha planted last season.

BUSINESS REPORT

Story continues below Advertisement

Related Topics:

Free Market Economy

Share