South Africa- Summer grains and oilseeds outlook- 2019 /2020

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The total of 2.3 million maize hectares planted in 2019 is only 0.8% below the area planted with maize in 2018, according to the BFAP Baseline Agricultural Outlook for the period 2019 to 2028.

Contrary to maize, producers planted 17% more sorghum than the initially reported intentions in 2019, an implied increase of 75% year on year. Oilseed plantings were also not completed, with only 90% of the intended sunflower area being planted and only 86% of the intended soya bean area.

Consequently, the area cultivated to sunflower and soya beans in 2019 is expected to decline by 14% and 17% respectively compared to 2018. Despite the poor weather conditions in the early planting season, the cotton area is expected to expand again by almost 27% in 2019, having already increased substantially in 2018. Combined with minor yield gains, the expansion is expected to support a 31% increase in cotton production in 2019.

With the exception of cotton, yield expectations for all summer crops are lower than in 2018, with the latest estimates from the crop estimate committee (CEC) pointing to a 10.9 million tonnes maize harvest - down 13% from 2018 levels. Combined with 2.7 million tonnes of stock on 1 May 2019, this is sufficient for domestic consumption and exports are projected to reach just over 1 million tonnes in the current marketing season, leaving South Africa in a net exporting position, despite some imports expected to occur into coastal regions, particularly the Western Cape.

In the case of sorghum, the CEC is expecting a crop of 166 thousand tonnes sufficient for domestic consumption when combined with 51 thousand tonnes of carryover stock.

In the case of oilseeds, the CEC expects sunflower production to decline by 29% year on year, necessitating more than 80 thousand tonnes of imports, despite significantly lower crush volumes expected in 2019 relative to 2018.

By contrast, high carryover stock of soya beans should enable crush volumes to increase in 2019, despite an expected decline 16% in production volumes compared to 2018.

The combination of smaller crop, stock drawdown, weaker exchange rate and concern regarding the early US planting season is expected to support prices, with annual average prices for white maize and yellow maize projected at R2918 and R2891 respectively in 2019. This results in a 16% increase in the gross value of maize production in 2019 (14% for white maize and 18% for yellow maize), despite the smaller crop.

In the case of sunflower and soya beans, projected price gains are insufficient to off-set the reduction in production volumes, resulting in a decline of 24% and 1% in gross production value respectively in 2019. Whilst sorghum and cotton are much smaller industries in total value, the gross production value of both are expected to increase substantially in 2019, by 32% and 73% respectively from 2018 levels. In the case of sorghum, this is partly because the area cultivated to sorghum declined to an all-time low in 2018, but for cotton it follows strong growth in 2018 and represents the continuation of a strong revival in the industry in recent years.