• In the one hand, dams that just a few years ago were almost running on empty are now filled to the brim, and much of the South African veld is a riot of green that has unfolded under a canopy of clouds. But too much rain makes no grain, and farmers, as well as industry watchers, are now looking skyward for a sunny reprieve.

  • Since our previous inflation brief in November 2021, the identification of the Omicron variant, combined with excessive rainfall in the summer rainfall areas, has presented the possibility of further supply disruptions that could affect global and local inflation.

  • The bi-monthly, three-day meeting of the SA Reserve Bank’s (SARB’s) Monetary Policy Committee (MPC) will end on Thursday with a 25 basis-point hike in its repo rate, which will take the prime lending rate to 7.5%.

  • When President Cyril Ramaphosa visited Soweto last year to campaign in the local government elections, there were serious protests.

  • When nations closed their borders and instituted travel bans and other restrictions on movement, the tourism industry received the world’s attention.

  • Climate and Agri conditions January 2022- South Africa

  • The excessive rains since the start of South Africa’s 2021/22 summer crop production season in October 2021 raised concerns that farmers might not have been able to till the initially planned area of 4,34 million hectares (up by 3% from the 2020/21 production season). The preliminary plantings data released this afternoon by the Crop Estimates Committee proved this point to be accurate. Still, the actual plantings are a relief as many analysts, with ourselves included, thought we would see a much smaller area. Farmers are estimated to have planted 4,21 million hectares, which is 3% less than their intentions at the start of the season. The slight declines are in maize, soybeans, groundnuts, sorghum and dry beans. Meanwhile, sunflower seed plantings are up from the initial intentions.

     But the best way to view this data is by comparing it with the area planted in the 2020/21 production season, and from this perspective, farmers planted 0,4% more hectares. The increase is on sunflower seed (up 21% y/y with 580 000 hectares) and soybeans (up 10% y/y, with 910 000 hectares). For these crops, the estimated area is well above the 10-year average plantings, and in fact, a record area for soybeans.

     Other crops area declined; specifically maize whose plantings fell by 5% y/y with 2,61 million hectares. Still, this is well above the 10-year average area planting of 2,53 million hectares. Moreover, the groundnuts area is down by 12% y/y, with 34 000 hectares, which is well below the 10-year average of 43 348 hectares. Sorghum and dry beans plantings are down 29% y/y and 10% y/y, with 35 000 hectares and 42 450 hectares planted, well below the 10-year average.

     Now that we have the plantings data, the discussion will likely shift to yields, a crop tonnage per hectare. Considering the major grains and oilseeds, such as maize, soybeans, and sunflower seed, the yields in the past 10-years averaged 5,02 tonnes per hectare (t/ha), 1,78 t/ha and 1,30 t/ha, respectively. The 2014/15 production season was one of the lowest yields, especially maize, as this was a drought year. The yield was 3,75 t/ha. It is unclear where the yields will be in the 2021/22 production season. Still, various industry surveys and our general observations suggest that the areas such as the western regions of the Free State, North West, and parts of the KwaZulu Natal and the Eastern Cape, which received heavy flooding, could realize lower yields than the previous season.

     South Africa will need at least an average national yield of 4,60 t/ha to have a maize harvest of 12,01 million tonnes in the current area planting if we have sufficient maize supplies for domestic consumption. Such a yield estimate is possible given that the floods that caused the damage were not a nationwide challenge but certain regions of some provinces. Still, it will be a month until we have official first production estimates from the Crop Estimates Committee. The current plantings data provides some comfort that plantings didn’t decline as notably as some might have feared and are marginally above the 2020/21 production season.

     Notably, while this data is comforting, and we base our views on this note on it, we caution the reader that on 28 February 2022, when the Crop Estimates Committee releases its first production estimates, there might be some revisions on it.

     For now, we doubt that the planting information will have a notable impact on the domestic grains and oilseeds prices. First, the grain market participants will now focus on possible yields and weather conditions; this will be more evident over time. Secondly, the domestic grains and oilseeds market is still primarily influenced by global events such as crop conditions in South America, a significant producer in the global market, grains and oilseed demand in China, and most recently, the geopolitics in the Black Sea region. All these global factors present a temporary upside pressure on prices.

     With that said, the global production estimates remain relatively robust, which signals that the medium-term price trend of global grains could be sideways, which could be a reality here in South Africa. The International Grains Council and the United States Department of Agriculture forecast 2021/22 global maize production forecast at 1,2 billion tonnes, up by 7% y/y. Subsequently, the 2021/22 global maize stocks at 287 million tonnes, up by 3% y/y.  This bodes well for a sideways to slight downward price trend over the coming months.

  • While we have started the year focusing on domestic factors affecting South Africa's agriculture and agribusiness, especially given the recent excessive rains that have worried some farmers, geopolitics factors have now also come to the fore.

  • The British government and Parliament plans to ban the import of hunting trophies as part of a conservation initiative to protect endangered animals have been received with great enthusiasm by many organisations and individuals globally – and with sharp criticism from others.

  • Reversing soil degradation is vital if we want to feed a growing global population, protect biodiversity and help address the planet’s climate crisis, the Director-General of the Food and Agriculture Organization of the United Nations (FAO), QU Dongyu, today told a meeting of agriculture ministers in Berlin.

  • The twin challenges facing South Africa today — low growth and rising unemployment — are not new.

  • Die haglike toestand van Suid-Afrika se paaie is tans ’n veiligheids- en ekonomiese-risiko vir landbou en individue.

  • Faced with cheap, often subsidised, imports, many local dairy farmers have quit production in recent years.

  • The higher input costs, which have been the dominant feature of South Africa's agricultural sector over the past year, will likely prevail in the coming months, with negative effects on farmers' financial conditions.

  • Today, most countries are placing unprecedented pressure on water resources.

  • March marks the end of southern Africa’s 2021/2022 summer wet-season. Since its onset in October, most summer rainfall zone regions have experienced wetter than normal conditions.

  • The Zondo commission’s recent reports have provided chapter-and-verse on the fraud and inflated pricing that bedevilled so many of the Gupta-linked procurement contracts entered into by Transnet and other state-owned enterprises during Jacob Zuma’s presidency. 

  • Recent cabinet decision to look at land tax again In 2019 the Presidential Advisory Panel recommended that the Minister appoints a land tax inquiry to consider a national policy or regulations to the Municipal Property Rates Act of 2004.

  • On a brisk morning in late October, wisps of snow and brittle leaves scuttle across the hillside at Calabash Gardens in Wells River, Vermont.

  • Food security is a global priority – and it is becoming more urgent in the face of climate change, which is already affecting crop productivity. One way to improve food security is to increase crop yields.