Almost every December
holiday I drive from Gauteng to the Eastern Cape, not only to enjoy the
majestic views on the way, but to also
use the opportunity to do a mini crop tour.
In a normal rainfall
season the vegetation would be green all the way, particularly with recently
emerged maize and soybean fields in the Free State and Gauteng, and in-between
with livestock pastures.
I left Pretoria yesterday
morning with an inkling that this time around the journey would not be as
amazing as the previous years, as many areas have not received sufficient
rainfall, and that would have led to delays in planting activity.
My suspicion was
confirmed just as we left Johannesburg on the stretch to Kroonstad. This area
was largely brown fields of soil preparation. That was mainly the case all the
way to the Free State.
There were a few
green fields, but those were mainly under irrigation. Conditions were worse
between the southern Free State into the Eastern Cape, with the only visible green
patches being along the main rivers – with irrigation.
Drying up
All of this
dovetailed with the information we have been receiving from farmers, specifically
in the Free State and North West, as well as weather reports of dryness in
these areas.
In my conversation
this morning with Corne Low of Grain South Africa, it became clear that the
North West is in an even worse position than what I saw in the Free State, with
the dryness leading to low planting activity in the area.
The promise of sunflower seeds
Given that it is
already late in the year for additional maize planting, it is good to look at
the possibilities of sunflower seed planting as they can still be planted until
January 2019. It is increasingly becoming clear that the optimistic views on an
increased planting area that farmers expressed earlier in the year will not
materialise.
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Remember, in October
2018, South African farmers intended to increase the area planting for summer
grain and oilseed by 5% from 2017/18 season to 4.03 million hectares.
Most summer crops
were expected to show an uptick, with the exception of sunflower seed and
groundnuts. This was partly driven by the favourable agricultural commodity
prices.
At the moment, SAFEX
yellow and white maize prices are up by over 30% from levels seen in December 2017 largely due to the aforementioned
weather challenges.
The question in many
people’s minds is: how much area will actually be planted for major grains and
oilseeds, and what impact all of this will have on South Africa’s food
inflation and agricultural economic growth?
In this regard, it is
clear that the optimistic estimate that we, at the Agricultural Business
Chamber of South Africa (Agbiz), expressed of 12.2 million tonnes for maize,
might not materialise, due to large areas not having been planted, and weather
conditions remain dry.
Moreover, our
colleagues at the Bureau for Food and Agricultural Policy (BFAP) have recently
lowered their estimate for South Africa’s maize harvest to 10.4 million
tonnes.
From a government
perspective, the national Crop Estimate Committee will release its view on the
area planted at the end of January, and that will give us a sense of the
potential size of the crop for the 2018/19 production season.
What we know at the
moment is that things are not looking good.
But let me end with
an optimistic note by highlighting that South Africa will have roughly 3.3
million tonnes of maize stocks at the end of the marketing year in April 2019.
So the 2018/19
production crop will build onto something when we start the 2019/20 marketing
year in May 2019.
All of this made the
drive to the Eastern Cape unpleasant, but most importantly, educational; as we
learnt about the conditions on the ground. I hope that when I drive back there
will be some green shoots in the fields - even if it's sunflower seed - and
improvement in the pastures.
Wandile Sihlobois an agricultural economist and head
of agribusiness research at the Agricultural Business Chamber of South Africa
(Agbiz). Follow him on Twitter: @WandileSihlobo