He also provides more information about the latest developments in the agricultural sector. 

Here is Sihlobo...

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He says  South Africa’s 2020/21 summer grain and oil seed planting season should begin in areas with sufficient soil moisture from the end of this week. This will be the start of an optimal planting window in the eastern regions of the country. The optimal planting window for the central and western regions of South Africa will only open from the beginning of November.

According to Sihlobo, the two most important indicators to be observed to get a sense of farmers’ potential planting decisions for the coming season are commodity prices and the weather outlook. Both of these are generally positive for the 2020/21 season. Commodity prices remain at higher levels, which might be ironic as the 2019/20 season had large supplies which would have ordinarily added pressure on prices. South Africa had the second-largest maize harvest on record, about 15.5 million tonnes (yellow maize at 6.5 million tonnes and white maize: 9.0 million tonnes) and the third-largest soybean harvest on record (1.26 million tonnes).

Yet, At the end of the past week, South Africa’s soybeans spot price traded at R8 100 per tonne, up 39% year-on-year, while white and yellow maize spot prices ended the week at R3 494 per tonne and R3 350 per tonne, each up by roughly 23% respectively. These price increases are precipitated by the weaker domestic currency, coupled with growing demand from China and other Asian markets in the case of soybeans. China is rebuilding its pig herd, the world’s largest, which was decimated by the deadly African swine fever last year. This process has led to a notable increase in global soybean imports in recent months, and in turn, in prices. South Africa’s soybean prices tend to follow global soybean prices, in part because of the import dependence status. South Africa imports about half a million tonnes of soybean meal a year. Therefore, the uptick in global soybean prices has fed into domestic soybean prices.  

In the case of maize, South Africa is a net exporter, which means that the global market developments tend to have a smaller impact than with soybeans, but the likes of South Korea, Vietnam, Japan, and Taiwan, have been relentless in buying domestic maize (primarily yellow maize). In the week of 18 September 2020, South Africa’s 2020/21 total maize exports were at 1.46 million tonnes, which equates to 54% of the seasonal export forecast (2.70 million tonnes). Yellow maize exports accounted for 75% of the volume already exported, with 25% being white maize. 

Together with that, the weather outlook for the 2020/21 production season remains favourable. In its recent seasonal climate watch the South African Weather Service noted that “the El Niño-Southern Oscillation is currently in a weak La Niña state and the forecast indicates that it will most likely remain and strengthen towards a moderate La Niña state during early- and midsummer. With this strong likelihood of a moderate La Niña, there are increased chances of above-normal rainfall in the summer rainfall areas during the coming summer season.  

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