Paul Makube

As expected, the latest Crop Estimates Committee’s (CEC) production estimate report showed an upward revision to the February estimate for maize to 10.56 million tons. This follows good rains since early January that stimulated farmers to increase the pace of planting. Although the current estimate is down 16% by 1% year-on-year (y/y), it is better than earlier expectations of a further cut in maize output. The expected carry over stock of 3.2 million tons by the end of the 2018/19 marketing … [Read more...] about Crop estimates not enough to lift agriculture GDP in the near term

The rebound in production conditions from the beginning of January 2019 spurred farmers to catch up with plantings of summer crops, particularly maize whose planting window was almost closed. This is reflected in the first National Crop Estimates Committee’s (CEC) production estimate report which raised the total maize area planted by 0.7% from the January estimate to 2.3 million hectares, but still marginally down by 1% year-on-year (y/y). The production estimate came in down by 16% y/y at … [Read more...] about A cut in summer crop output

An important lesson from the current Eskom crisis is the lack of investment overtime, and as with this critical institution of our economy, agriculture is equally facing the same challenge. Infrastructure that supports agriculture such as roads, ports and rail needs serious upgrading. The Minister’s announcement for supporting private sector investments in agriculture by emerging farmers is most welcome. The allocation consists of R1.8 billion for the implementation of 262 priority … [Read more...] about Budget 2019 – The Agriculture outcomes

After a slow start to the 2018/19 summer crop season with severe dryness during December 2018 in the growing areas particularly in parts of the North West and the Free State, conditions rebounded early in January 2019 as good rains provided the much-needed moisture for planting. Farmers proceeded to plant and although some have reportedly planted beyond the planting window in the west which put them at risk of frost damage. The latest National Crop Estimates Committee (CEC) report indicates … [Read more...] about Good rains lift crop production estimates

After a brief hiatus with the government absorbing about R500 million of the fuel hike and only allowing 5 cents increase in September, the situation has deteriorated with the recent announcement by the Department of Energy (DoE) report showing that petrol prices will jump by 99 cents and R1/ litre for the two grades (93 and 95 Octane, ULP and LRP) respectively and diesel recording the biggest increase of R1.24/ litre for all the grades from October 3rd. This unavoidable increase is largely … [Read more...] about Consumers take massive strain as fuel prices are set to hit a record high

Following a stellar performance in 2017, South Africa’s agriculture output shrank by massive 29.2% in the 2nd quarter of 2018 and contributed -0.8 of a percentage point to GDP growth. This follows a contraction of 24.2% quarter-on-quarter (q/q) in the 1st quarter 2018. The decline was attributed to a decreased production in fields crops and horticultural products. For field crops, this was not surprising as planted area for 2017/18 for crops that are currently being harvested was cut by 7% … [Read more...] about GDP shocker, and a further drop in agriculture output

A further strain on the consumer has almost been averted following the announcement of the intervention by the Department of Energy to limit the fuel increase to only five cents per litre to cover the costs of wage increases of frontline staff at service stations. Otherwise, there was no fuel increase. Earlier projections indicated that the fuel price should have increased by over 20 cents per litre, which means the government has absorbed the bulk of the increase with this once-off … [Read more...] about Bruising fuel hike averted, at least for now

As expected, another fuel hike is scheduled for midnight Wednesday 4th which is going to hit the consumers hard. According to the Department of Energy, Petrol (95 ULP & LRP) will increase by 26 and 23 cents a litre for the two grades of petrol respectively. The diesel prices go up by 24 and 22 cents a litre for the two grades (0.05% and 0.005% sulphur) respectively. This means the 95 ULP petrol will reach a record high of R16.02 a litre and R15.80 a litre for the inland and the coastal areas … [Read more...] about Fourth consecutive fuel hike will hit the consumer

Paul Makube, Senior Agricultural economist at FNB Agri-Business says: The South African consumer faces another hefty hike in fuel costs effective Wednesday June 6 according to the recent announcement by the Department of Energy. Petrol (95 ULP & LRP) and diesel prices will increase by 82 cents a litre for all grades and diesel by 85 and 87 cents a litre for the for the two grades (0.05% and 0.005% sulphur) respectively. This means the 95 ULP petrol will reach a record high of R15.79 a … [Read more...] about Fuel hike puts pressure on consumers and agriculture sector

Comment by Paul Makube, Senior Agricultural economist at FNB Agri-Business: From an agriculture perspective, unchanged rates bode well for the sector as it is grappling with a national agriculture debt in excess of R160 million. Producers, particularly in the Western Cape, the Eastern Cape and Northern Cape are still grappling with losses from the recent drought and the relatively low interest rates will alleviate pressure on profitability. Since the MPC review in March, the rand depreciated … [Read more...] about Unchanged interest rates bode well for Agriculture sector

Comment by Paul Makube, Senior Agricultural economist at FNB Agri-Business: South Africa’s agricultural sector has powered relatively well post the devastating drought two years ago, helping the country avoid a recession in 2017 and assisted in taming inflation with robust output. Apart from favourable production conditions across the country except for the Western Cape, the sector benefited from relatively lower Brent crude oil prices and a stronger exchange rate because of their effect on … [Read more...] about Consecutive fuel price hikes may hit consumers hardest

South Africa has kept to all prior predictions and has registered a record harvest season with the total grain and oilseed crop of 18.91 million tons, which is up 101% year-on-year. The estimate for the maize crop in particular came in at an all-time high of 16.41 million tons, which is comprised of 59% yellow and 41% white maize. The winter rains however have not retained the momentum; The Western Cape is still grappling with persistent drought conditions. “Weather is critical for price … [Read more...] about A record maize season

Profitability in grain and animal farming is largely driven by input cost management, the lower the total of input costs the greater the profits yielded. Paul Makube, Senior Agricultural Economist at FNB answers a few questions on the biggest expenses in animal and grain farming; he proposes some cost cutting measures for farmers in these sectors. What are the biggest expenses in animal and grain farming? Fertiliser accounts for roughly 22% of the direct variable costs, followed by fuel … [Read more...] about Managing input costs key to animal & grain farming profits