South Africa’s 2018 maize crop expected to be 33 percent lower than previous season

JOHANNESBURG (Reuters) – South African is expected to harvest 33 percent less maize in 2018 compared with a record crop in the previous season after a decrease in plantings and low rainfall in the western part of the maize belt, a Reuters poll of six traders and market analysts showed on Friday.

The government’s Crop Estimates Committee (CEC), which will provide its first production forecast for the 2018 crop on Tuesday, is seen pegging the harvest at 11.301 million tonnes, down 33 percent from the record harvest of 16.82 million tonnes for the 2016/2017 season.

The 2017 harvest was the largest on record surpassing the previous record of 14.656 million tonnes set in 1981 after favourable weather conditions boosted yields.

The 2018 harvest is expected to consist of 5.725 million tonnes of the food staple white maize and 5.575 million tonnes of yellow maize used mainly in animal feed.

The total maize yield will likely still be lower than the previous season due to a reduction in the area planted down 12 percent to 2,309,200 hectares.

The expected smaller crop will however be above South Africa’s annual maize consumption of around 10 million tonnes.

“From a supply point of view, this is not a much of an issue as the expected crop is well above annual consumption of 10.5 million tonnes and there will also be large a carryover stock of 4.2 million tonnes,” said economist at the agricultural business chamber, Wandile Sihlobo.

White maize prices have however remained depressed after a bumper 2016/2017 crop across the region with the contract ending May closing 66 percent lower to 1,830 rand on Friday compared to highs of 5,376 rand reached in January 2016 when yields were hit by a severe drought.

A spell of hot, dry weather over a swathe of the maize belt earlier in the year, raised concerns and spiked prices in January but industry experts expect improved rainfall conditions will now boost those yields.

“Certain regions affected by dryness early in the season now look more promising,” said trader and director at Riddermark Capital Warren Langridge referring to the western sections of the Free State and North West provinces.

(Reporting by Tanisha Heiberg; Editing by James Macharia)

Xolani

Related Posts

Join the Discussion

Your email address will not be published. Required fields are marked *

arrow
%d bloggers like this: