PERIOD UNDER REVIEW: May 2018 Compiled by Maliviwe Makeleni
South African Grain Market
On 31 May 2018, the WEAT futures contract traded at R3808 per ton for physical deliveries to
take place in June 2018. The WEAT May18 contract traded 15% y/y or R672 lower per ton
compared to the same period traded in the previous year. Whilst the WEAT May18 contract
traded 3.3%, m/m or R126 per ton higher in relation to the contract traded in the previous
month (SAFEX, 2018).
Table 1.1: Mark-to-market prices for the Summer Crops and Winter Cereals as traded on SAFEX
MTM-Prices (31/05/2018) - expressed in
Rand/MT
Month
end
R/MT (31/05/2
017)
Year-
on-Year
Chang
e
Month
end
R/MT (31/04/1
18)
Month
end
R/MT (29/03/1
8)
Commodity/ Delivery Date
June18
Jul 18
Sep 18
Dec 18
Mar 19
May 19
Jul 19
May-17
May 17 vs 18
May-18 April-18
Wheat (RFTN)
3808
3863
3870
3860
-
-
-
4480
15%
3895
3769
White maize
2120
2125
2180
2259
2300
2340
2365
1763
20%
2037
1881
Yellow maize
2208
2232
2278
2357
2377
2364
2373
1893
18%
2148
1961
Sunflower
4590
4644
4781
4900
4906
-
-
4582
0.2%
4511
4620
Soybean
4476
4537
4635
4752
4852
4864
-
4493
0.4%
4681
4465
Sorghum
-
3010
-
-
-
-
-
2850
6%
3223 (Dec 2018)
3230 (May 2018)
Source (SAFEX, 2018)
Rainfall 20 -26 June 2011
The estimated maize is 23% smaller than the 2017 crop. The 4th crop estimate for 2018 crop
signifies an output of 12,908 million tons. On the same date, white Maize traded R2120 per ton,
which means a 20.25% year-year (y/y) gain per ton obtained of white maize for a corresponding
contract traded during this this time of the year in 2017 (SAFE, 2018). A decrease of 33.14% y/y
or 3.286 million tons of white maize compared to last year’s harvest of 9.9 million tons during the
same period (NCEC, 2018). We are starting to see the increase in prices of white maize as the
production is estimated to be lower this year compared to last season. Yellow maize followed
the same trend with 10.24% y/y or 706 850 tons decline of production compared to last year’s
harvest of 6,904 mill. tons. The YMAZ May18 traded at R2208 per ton, which equates to 18% y/y
more for the same period last year (SAFEX, 2018).
Sunflower output is expected to remain unchanged at 792255 tons in relation to the previous crop
estimate, representing a 9% y/y or 8745-ton increase in relation to the previous production season
(NCEC, 2018). Accordingly, sunflower prices bounced back in response to market dynamics and
traded at R4590 per ton on 30 April 2017 whilst recovering to R4620 per ton on 31 May 2018(SAFEX,
2018).
Soybean futures was stable at R4, 476 per ton as per the May18 contract (SAFEX, 2018). This
translates in a 0.3% y/y or R17 per ton lower in relation to the same contract traded in the previous
year (SAFEX, 2018). The 4rd soybean crop estimate remain unchanged at 1, 43 million tons, it is
8.69% y/y or 111 300 tons higher in relation to the previous year’s harvest (NCEC, 2018).
Sorghum futures traded at R3010 per ton, translating into a 5.6% y/y or R160 per ton increase in
relation to the futures contract traded within the same period within the previous year (SAFEX,
2018). A reduction of 68,930 tons or 45.35% y/y is estimated for the 2017/18 sorghum production
season, which can be attributed to the 32% y/y or 13,550-hectare decrease in the area planted
(NCEC, 2018).
On the other hand, a slight increase of 300 hectares of groundnuts has been planted for the
2017/18 season which will boost harvest in the 2017/18 production by 11,200 tons (NCEC, 2018).
The dry bean production estimate is however slightly negative, as it anticipated that it would
decrease by 4.25%.
12. WINTER CEREAL PRODUCTION ESTIMATES: 2018 SEASON
The estimated total production figures by the NCEC were revised using the published figures of
SAGIS of actual deliveries as the basis for the calculations. Comparing the final calculated crop
figures with the numbers set by the CEC during February 2018, the size of the commercial wheat
crop is now 1 524 000 tons, which is 10 250 tons or 0,67% more than the final crop estimate figure
of 1 524 750 tons. For malting barley the recalculated crop size is 307 000 tons, which is 64 tons or
0,02% less than the final crop estimate figure of 307 064 tons. The final recalculated canola crop
estimate figure is 93 468 tons, which is slightly higher (32 tons or 0,03%) than the final crop estimate
of 93 468 tons (SAGIS, 2018).
1.3. Producer Deliveries
Weekly producer deliveries for wheat
Source (SAGIS, 2018)
As from 28 April 2018 until 01June 2018, an additional 8652 tons of wheat has been delivered to
the market (SAGIS, 2018). As a result, the progressive deliveries amounted to 1,482 million tons,
which represents a 97.25% delivery rate in relation to the crop estimate of 1,524,750 tons (SAGIS &
NCEC, 2018). There were more deliveries compared to the month of April by 39% meaning there
were more tons delivered during the month of May. There was a significant adjustment made on
week 34 with about 1922 tons.
1 490 000
1 495 000
1 500 000
1 505 000
1 510 000
0
1 000
2 000
3 000
4 000
28/04 -04/05/2018
05/05 -11/05/2018
12/05 -18/05/2018
19/05 -25/05/2018
26/05 -01/06/2018
Week Total vs Progressive Total
Week Total Progrssive Total
Maize
Source (SAGIS, 2018)
As from 28 April to 01 June 2018, a total of 330 289 tons of white maize and 585480 tons of yellow
maize was delivered to the market (SAGIS, 2018). These are new deliveries for the 2018/19
marketing season starting from 01 May 2018 to 30 April 2018. The crop estimate from white and
yellow maize is 6 701 260 tons and 6 207 350 tons respectively. Subsequently, this led to a 5%
delivery rate for white maize and 9.4% delivery rate for yellow maize (SAGIS, 2018).
0
50 000
100 000
150 000
200 000
0
50 000
100 000
150 000
200 000
250 000
300 000
350 000
28/04 - 04/05/2018 05/05 - 11/05/2018 12/05 - 18/05/2018 19/05 - 25/05/2018 26/05 - 01/06/2018
Weekly Producer deliveries for white maize
Week Total Progressive Total
0
50 000
100 000
150 000
200 000
250 000
300 000
350 000
400 000
0
100 000
200 000
300 000
400 000
500 000
600 000
700 000
28/04 - 04/05/2018 05/05 - 11/05/2018 12/05 - 18/05/2018 19/05 - 25/05/2018 26/05 - 01/06/2018
Weekly producer deliveries for yellow maize
Week Total Progressive Total
1.4. Exports, Imports and Re-exports
Table 2a: Wheat trade for the 2017/18 marketing season, according to tons (SGIS, 2018)
Progressive wheat exports 2017/18 47502
Wheat exports during the reporting period 10056
Importing countries Share in RSA
exports
Zambia 53
Swaziland 20
Namibia 14
Botswane 13
Zimbabwe 1
Source (SAGIS, 2018)
Supply and the demand estimates 2017/2018 wheat marketing season
The total wheat supply estimate is currently standing at 3 786 424 million tons for the 2017/18
marketing season. The largest portion thereof will consist of imported wheat, which is estimated at
50.97% or 1,930 million tons of the total supply and a surplus of 10 000 tons during the 2017/18
marketing season which is ending on 30 September 2018 (NAMC, 2018). In addition, producer
deliveries are only expected to contribute 39.75% or 1 505 million tons of the total supply for the
corresponding marketing season, in addition to the stock (9% or 341,424 tons) that was carried
over from the previous season (NAMC, 2018).
On the demand side, the 3,268 900 tons required for the local and export market changed slightly
in relation to the previous reporting period (NAMC, 2018). 96% of the local market requirement is
for human processing within the local market, whereas the export requirements estimated was
adjusted to 2% or 85,000 tons (NAMC, 2018). The closing stock is estimated to end-off at 517,524
ton (SAGIS, 2018). The retention stock is expected to last for at least 2 months or 60 days (NAMC,
2018).
In addition, Zambia was the leading export destination for South African wheat with a share of
53%, followed by Swaziland (20%), Namibia (14%), Botswana (13%) and Zimbabwe (1%) during the
reporting period.
Table 2b: Maize trade for the 2018/19 marketing season, according to tons Source:
SAGIS, 2018
Progressive maize
exports during the
reporting period:
2017/18
White maize:
67 172
Yellow maize:
328 753
No imports – due to
bumper crop
harvested during the
current production
season Maize exports during
the reporting period:
(28 April to 01 June
2018)
40 281
227 146
Importing countries Share in white maize
exports
Share in yellow
maize exports
White Maize
exports
during the
reported
period, from
28 April to 25
May 2018,
about 17 576
tons was
exported via
the Durban
harbour.
Botswana 47 1
Mozambique 18 1
Namibia 13 1
Lesotho 12 -
Swaziland 6 3
Vietnam - 24
Korea, Rep of - 24
Italy - 23
Taiwan, Prov of
China
- 23
Source, (SAGIS, 2018)
During the 2018/19 marketing season, the total supply of maize is estimated to amount to 16 281
803 tons. White maize is expected to contribute 55.2% of the total maize supply while yellow maize
represents 45%. Worth noting is the fact that the opening stock levels for white and yellow maize
were almost 50% lesser than the stock levels within the corresponding period last year (NAMC,
2018). However, due to the bumper maize crop, no imports were required as there was no shortfall
within the domestic market (NAMC, 2018).
On the demand side, a total of 13 140 000 tons of maize is required to meet the demand within
the domestic and export market (NAMC, 2018). However, the largest share thereof is for local
market requirements at 10, 790 00 tons of which 61% is for white maize and 39 % for yellow maize
(NAMC, 2018). Export market maize requirements are estimated at the decrease by 5.2 % y-o-y or
129 111 tons and amount to 2,525 million tons of which white maize exports is estimated at 30.6%
or 720 000 tons and yellow maize exports at 69% or 1,630 million tons (NAMC, 2018). The closing
stock for maize is thus expected to close on 3,141 million tons at the end of April 2018 (NAMC,
2018). This equates to 553 390 tons or 15 % y-o-y lesser than the closing stock reported for the
corresponding period in the previous marketing season (NAMC, 2018). White maize will constitutes
54% thereof, whilst yellow maize will constitutes 46% of the projected closing stock (NAMC, 2018).
The retention capacity would thus amount to 3.1 months’ worth of white maize and 4.4 months of
yellow maize considering the processing requirements of 542,750 tons of white maize and 330,667
tons of yellow maize within the local market (NAMC, 2018).
During the reporting period, the main exports destinations for South African white maize are
Botswana (47%), Mozambique (18%), and Namibia (13%) with a combined share of 78 percent.
On the other hand, Vietnam), Italy, Korea, Rep, and Taiwan altogether absorbed the largest share
of South Africa’s yellow maize exports (94%) during the period under review (SAGIS, 2018).
2. WEATHER ADVISORY ON THE 2017/2018 SUMMER SEASON, May 2018 Figure 3.1: Vegetation Conditions Index for April and May Above-normal vegetation activity occurred over the Free
State, North West and Gauteng and in distinct areas of
KwaZulu-Natal, Limpopo and Mpumalanga compared to
the long-term mean. Meanwhile, below-normal
vegetation activity persists in the Western Cape and
Eastern Cape, and isolated areas of Northern Cape and
Limpopo.
The VCI map for April indicates below-normal vegetation
activity over most of the Western Cape, in some isolated
areas of the Northern Cape, mainly in the southwest, the
western region and distinct parts of the Wild Coast and Berg
areas of the Eastern Cape and in a few distinct areas of
Limpopo compared to the long-term me
Drought remains in the province and conditions are not
conducive for establishing crops in the various areas. The
overall water level of state dams in the province remained critically low even though it’s a percent
higher compared to the previous year, 19% in 2018 and 18% in 2017 (DAFF, 2018). The two largest
dams, namely the Theewaterskloof (479.3 million cubic meters) and the Brandvlei (286.1 million
cubic meters) respectively stood at 20.9% and 18.8.8% during 18 June 2018, compared to 16.7%
and 14% during the corresponding period last year (DWS as cited by Elsenburg, 2018).
Alternatively, visit the Elsenburg Website at http://www.elsenburg.com/agri-tools/western-cape-
dam-levels to obtain the most recent update on dam levels within the Western Cape (Elsenburg,
2018).
Strategies to mitigate climatic change and related disasters
A comprehensive list of strategies can be retrieved from the monthly NAC Advisory report issued by DAFF: Climate
Change and Disaster Management. Access the mentioned list from the following websites: www.daff.gov.za and
www.agis.agric.za .
Request weather warning notifications from the Western Cape Department of Agriculture: Sustainable Resource
Management, Disaster Risk Management, by forwarding an email to Mrs. Zaibu Arai to [email protected] or
alternatively call (021) 808-5368. Source: DAFF National Agro-meteorological Committee (NAC) Advisory, 2018.
Additional sourced to information regarding climatic conditions, can be obtained in the monthly Agri-Outlook reports Click here to view the monthly Agri-outlook reports. The Agri-outlook report provides a summative overview of both climatic and agricultural
conditions in the Western Cape, through reference to information regarding the rainfall, temperatures, dam levels, plant growth conditions as
well as climatic forecast within a particular period. Alternatively visit the Elsenburg Website www.elsenburg.com and go to Agri-tools Agri-
Outlook (Elsenburg, 2018).
3. Economic Reviews
After growing by 3, 1% in the fourth quarter of 2017, the South Africa economy wobbled in the first
quarter of 2018, shrinking by 2,2% quarter-on-quarter (seasonally adjusted and annualised).
Agriculture, mining and manufacturing were the main contributors to the slowdown, with the
electricity, construction and trade industries also recording negative growth.
After recording four consecutive quarters of robust growth in 2017, the agriculture industry lost
ground in the first quarter of 2018, contracting by 24,2%, the largest quarter-on-quarter fall since
the second quarter of 2006.
Agriculture’s relatively strong performance in 2017 is one of the positive factors that helped keep
the economy afloat in 2017. This momentum failed to carry through to 2018, with decreased
production in field crops and horticultural products contributing to the decline in the first quarter.
Figure 4.1. Exchange Rate in relation to major currencies
Source (SARB, 2018)
During the month of May and June 2018, the ZAR exchange rate weakened against the major
global currencies such as the US dollar (USD), Great Britain Pound (GBP) and Euro (SARB, 2018).
The rand weakened by 3.6% and 5.4% respectively m-o-m against the dollar and traded by R12.53
in May and R13.21 in June 2018. The GBP/ZAR appreciated by 0.9% in May and appreciated by
4.2% in June m-o-m and EUR/ZAR traded 0.3% in May and appreciated by 4.2% in June m-o-m.
4. Energy
Table 5.1.: Basic fuel Price adjustments
Product Description Numerical adjustment
applicable to the coast
parts in South Africa
Price adjustment Description The average price
applicable to the
coastal parts of South
Africa
Petrol 93 ULP 82 cents per litre increase in the
retail price
1505.00
Petrol 95 ULP & LRP
82 cents per litre increase in the
retail price
1520.00
Diesel 0.05% Sulphur
85 cents per litre increase in the
retail price
1370.030
Illuminating Paraffin
(Wholesale)
82 cents per litre increase the retail
price
866.588
LPGAS (maximum retail
price)
138 cents per litre increase in the
retail price
2318.00
0,00
5,00
10,00
15,00
20,00
Performance of South African exchange rate against major global currencies
02 May- 25 June 2018
USD
EURO
GBP
The Department of Energy has published its official price adjustment of fuel prices. Confirming an
increase of 82 cent cents per litre from both 93 ULP and 95 ULP & LRP, while diesel jumped by 85
cents. The illuminating Paraffin increased by 82 cents.
The average international product prices of Petrol and Diesel and Illuminating Paraffin increased
during the period under review. The Rand depreciated against the US Dollar during the period
under review, on average, when compared to the previous period. The average Rand/US Dollar
exchange rate for the period 25 April 2018 to 31 May 2018 was 12.5099 compared to 11.9797
during the previous period. This led to a higher contribution to the Basic Fuel Prices on petrol, diesel
and illuminating paraffin by 30.46 c/l, 31.17 c/l and 31.53 c/l respectively (DoA, 2018).
ACKNOWLEDGMENTS
The below-listed sources are acknowledged, as cited in this publication:
Agricultural Produce Agents Council (APAC): www.apacweb.org.za
Agricultural Research Council (ARC): www.arc.agric.za
Department of Agriculture, Forestry and Fisheries (DAFF): www.daff.gov.za
Department of Energy (DoE): www.energy.gov.za
Department of Water & Sanitation (DWS): www.dwa.gov.za
Elsenburg (Western Cape Department of Agriculture): www.elsenburg.com
Organization of the Petroleum Exporting Countries (OPEC): www.opec.org/opec
Potatoes South Africa: www.potatoes.co.za
South African Government: www.gov.za
South African Reserve Bank (SARB): www.sarb.gov.za
South African Revenue Services (SARS): www.sars.gov.za
Statistics South Africa (Stats SA): www.statssa.gov.za
Techno Fresh CRM: www.technofresh.co.za
For more information, contact:
The Western Cape Department of Agriculture
Programme: Agricultural Economic Services
Division: Marketing and Agribusiness
Tel: 021 808 5193 or 5189
Fax: 021 808 5210
E-mail: [email protected]
DISCLAIMER: The Western Cape Department of Agriculture has compiled this document and its
contents. The views expressed in this document are those of the Department of Agriculture with
regard to vegetable market information in the province unless otherwise stated. Anyone who uses
this information does so at his/her own risk. The Department of Agriculture or the author(s) therefore
accepts no liability for losses incurred resulting from the use of this information.