While rainfall late in December 2018 and early January 2019 have enabled South African farmers to start planting in the western parts of the Free State and North West, the harvest is likely to be poor, particularly for (white) maize as the optimal planting window has long passed, and even the late rains remain erratic.
Meanwhile, the eastern parts of South Africa, which predominately produce yellow maize and soybeans, could have a fairly good harvest if rainfall continue throughout this month and February 2019, which is typically a pollination period.
To recap, the eastern regions of the country, Mpumalanga, eastern Free State, KwaZulu-Natal and Eastern Cape, started the year on sound footing with widespread rainfall, which supported the planting activity.
Meanwhile, the central and western parts of South Africa received minimal rainfall all the way to Christmas. As a result, less than 20% of the intended maize in the western Free State and North West had been planted by 25 December 2018, compared to the normal seasons where maize plantings would be nearing completion over the same period.
However, the last few days of 2018 brought widespread showers across most parts of the country, which enabled plantings. The industry estimates suggest that at least 60% of the intended maize area in the North West had been planted around mid-January 2019, from levels of less than 20% in December 2018, as previously mentioned.
In the eastern Free State, the estimates suggest that roughly 70% of the intended area for maize has already been planted by end of 11 January 2018. Meanwhile, the north-western central Free State had planted roughly 60% of the intended area in the week of 18 January 2018.
Other provinces such as Mpumalanga, Northern Cape, Eastern Cape and KwaZuluNatal managed to plant the typical areas, with Limpopo reportedly experiencing a shift from maize hectares to cotton.
This time is different
The aforementioned production dynamics suggest that the intended area of 2.44 million hectares for maize in the 2018/19 season could probably fall by approximately 19% to 1.98 million hectares. This would be almost in line with the area planted during the drought period of 2015/16 production year. At that time, South African maize production amounted to 7.8 million tonnes, turning the country into a net importer, as annual maize consumption is roughly 10.8 million tonnes. During that year, there were relatively lower stocks as it was a second successive drier season.
Nonetheless, this time is different. South Africa’s maize ending stocks, which will be carried over to the 2019/20 marketing year at the beginning of May 2019 is estimated at 3.4 million tonnes. This will provide a much-needed buffer for the country’s supplies.
Most importantly, this suggests that if South Africa’s 2018/19 maize production could amount to at least 8.0 million tonnes, the country would have sufficient supplies for the whole 2019/20 marketing year, assuming that there will be minimal exports.
At the moment, the production estimates in the market generally vary between 10.4 million tonnes and 12.0 million tonnes.
Looking ahead, an important data point to look out for is the national Crop Estimate Committee’s preliminary planting estimate, which is due for release on 29 January 2019, as it will form the basis of the potential crop size.
Be that as it may, it is clear that 2018/19 production season will not be as good as what we saw in the previous season. Overall, this will have financial implications, not only to crop producers and consumers but also the livestock and poultry sector, which uses maize and soybeans as feed.
Nevertheless, I do not foresee a notable uptick of South Africa’s headline food price inflation, as possible lower meat prices on the back of the foot-and-mouth disease outbreak will somewhat overshadow the potential upswings.
Wandile Sihlobo, an agricultural economist, is head of agribusiness research at the Agricultural Business Chamber of South Africa (Agbiz). Follow him on Twitter: @WandileSihlobo