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

Here is Sihlobo...

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He says recently released high-frequency data shows that the outlook for South Africa’s 2020/21 summer and winter crop season remains positive.

Summer crops

This, as Sihlobo explains that even though summer crop growing areas are at early stages of planting, recently released intentions to plant data by the Crop Estimates Committee (CEC), show that farmers intend to increase the area plantings for summer crops by 5% year-on-year to 4.15 million hectares.

He says this includes yellow and white maize, sunflower seed, soybeans, groundnuts and dry beans. Furthermore, there is an expected increase in area plantings of most of these crops, except for sunflower seed, where the area plantings are anticipated to decline by 4% year-on-year to 480 500 hectares. This would be the smallest area in nine years. Sihlobo says this decline in sunflower seed planting is mainly on the expected shift in some hectares to white maize, in part, due to attractive prices.

Sihlobo further adds that some summer crop-growing regions of the country have started receiving summer rains and could continue to see good precipitation into February 2021. This is also the period where the South African Weather Service anticipates that there will be above-normal rainfall in the country as part of the expected La Niña weather event.

Winter crops

Sihlobo says the rainfall of the past couple of weeks in the Western Cape and generally has improved moisture levels in other winter crop growing areas of the country. He says this has also led to the further upward revision of the harvest estimate.

The CEC lifted wheat, barley, canola and oats planting by 5%, 1%, 9% and 6%, respectively from September this year to 2.13 million tonnes, 526 706 tonnes, 137 356 tonnes and 47 400 tonnes respectively.

Sihlobo adds that these will be the largest harvests on record for barley, canola and oats, while for wheat it will be the largest harvest in 19 years.

“Similar to other commodities, the increase in production will have minimal impact on prices, specifically wheat, of which South Africa is a net importer. And thus, wheat prices largely depend on developments in the global market, along with domestic currency movements,” explains Sihlobo.

However, while the country will remain a net importer, the volume will fall notably compared to the previous year. This, as the most recent estimates from the South African Grain and Oilseeds Supply and Demand Estimates Committee propose that wheat imports could fall by as much as 18% year-on-year to 1.54 million tonnes.

Sihlobo says this is favourable for the agricultural trade balance.

On the other hand, the recovery in barley production will see South Africa being a net exporter, while canola and oats will mainly be for domestic consumption.

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