The impact of the recent Western Cape drought to South Africa’s 2018 agricultural exports is marginal when viewed in value terms. South Africa’s agricultural exports for the first 11 months of 2018 amounted to US$9.9 billion, which is 0.5% lower than 2017 exports.
The African continent and Europe continued to be the largest markets for South Africa’s agricultural exports, collectively absorbing 65% of total exports in the first 11 months of 2018, measured in value terms.
On Tuesday, 29 January 2019, the national Crop Estimate Committee will release its preliminary area planted estimate for 2018/19 summer grains and oilseeds. This will be the first official data since the release of the planting intentions data on 25 October 2018.
As indicated in our previous notes, we believe that the intended area of 2.44 million hectares for maize in the 2018/19 season could fall by 19% to 1.98 million hectares. This is slightly above Bloomberg’s consensus of 1.97 million hectares.
The International Grains Council recently revised its estimate for South Africa’s 2018/19 maize production down to 10.7 million tonnes, from 12.3 million tonnes in November 2018 (and 12.9 million tonnes in the 2017/18 production season).
From a global front, the 2018/19 global maize harvest could be the second largest on record, up by 3% y/y at 1.08 billion tonnes. This is according to recent data from the International Grains Council.
The 2018/19 global soybean production is set to increase by 6% y/y to 363 million tonnes on the back of expected large harvests in the US, Argentina, China, India, Ukraine, Russia and Uruguay, amongst others.
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Sourced: Agbiz, Agribusiness Research