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Big harvests for 2020, from the summer to winter crops

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Paul Makube, Senior Agricultural economist at FNB Agri-Business says: Although the National Crop Estimates Committee (CEC) made a marginal upward adjustment to its earlier estimate of the country’s 2020/21 total grain and oilseed output, the 17.85 million tons is still one of the largest on record crop and is 34% higher relative to the 2019 levels. Despite earlier reduction in output in the Mpumalanga areas and reports that some of the maize in western areas has been downgraded to WM2, the total maize crop of 15.54 million tons is 38% higher year-on-year (y/y).

In the oilseed complex, the sunflower estimate came in 2.6% higher from the previous estimate at 785,910 tons while groundnuts saw 2.3% contraction at 64,800 tons. Although the soybean estimate was unchanged month-on-month (m/m), the harvest estimate is still 8% higher y/y at 1.26 million tons, which bodes well for local supply of soymeal.

For the winter crops, the first crop estimate came in by a massive 32.4% y/y at 2.64 million tons of wheat (74%), barley (19%), canola (5%), and oats (2%) as good rains and snow boosted crop prospects in the producing areas of the Western Cape. Wheat production is forecast up 27.8% y/y at 1.96 million tons which will help reduce the import bill as South Africa is still a net importer. The barley forecast jumped 46.4% y/y with the two smaller crops, canola and oats increased by 29% and 175.8% respectively y/y. The seasonal weather outlook is still positive and should see a good finish to the crop season.

Interestingly, grain prices especially maize have been unseasonably strong and will encourage farmers to plant more in the new crop season amid favourable production conditions with the La Nina weather pattern in the forecasts. This however poses upside risk to food inflation which has recently picked up pace in the July update at 4.6% y/y in July from 4.5% y/y in June 2020.

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Alan Straton

Chief Cook, Bottle Washer and Broom Mechanic at MyPE
Passionate about Port Elizabeth and definitely NOT packing for Perth. Alan's ethos is epitomised in the words of Nelson Mandela; "I have fought against white domination and I have fought against black domination. I have cherished the idea of a democratic and free society. If need be, it is an ideal for which I am prepared to die." See more articles by Alan.