South Africa to remain a net exporter of maize in 2018/19

There is generally some optimism in the South African maize market following good rainfall received in the past few weeks. Last night, the United States Department of Agriculture (USDA) lifted its estimate for South Africa’s 2017/18 maize production by 200 000 tonnes from last month to 13.2 million tonnes. This is on the back of expected higher yields in some parts of the country. With that said, this is still well below the record level of 17.5 million tonnes achieved in the 2016/17 production season.

It is worth noting that the USDA’s data covers both commercial and non-commercial production, hence the numbers differ from the National Crop Estimates Committee’s (CEC) one which mainly focuses on commercial production. The non-commercial production, which is mainly subsistence farming accounts for a 6 percent share in the estimated harvest of 13.2 million tonnes. Therefore, the USDA’s commercial maize production estimate is almost at par with the CEC’s estimate of 12.42 million tonnes.

The key message from these numbers is that South Africa’s maize market will be well supplied in the 2018/19 marketing year which starts on 01 May 2018. This marketing year will open with a large carryover stock of about 4.1 million tonnes, which will add to the expected large harvest noted above. As a result, South Africa could remain a net exporter of maize in the 2018/19 marketing year. The current estimates suggest that exports could reach 2.2 million tonnes (see Chart below), slightly below the 2017/18 marketing year’s exports of about 2.5 million tonnes. Importantly, this suggests that the SAFEX maize prices could remain at fairly lower levels for some time, all else being equal.

In that same vein, last week, South Africa exported 56 594 tonnes of maize, well above the previous week’s exports of 11 820 tonnes. About 95 percent of the exported volume was white maize, with the remainder being yellow maize. The leading buyer was Spain with a share of 79 percent of all exports. The last time Spain bought a notable volume of maize from South Africa was in 2010/11 marketing year, and that amounted to 26 039 tonnes. Overall, this placed South Africa’s 2017/18 maize marketing year exports at 2.1 million tonnes, which equates to 84 percent of the season’s export forecast of 2.5 million tonnes.

Chart: South Africa’s maize exports and imports

Source: SAGIS, SASDE, Agbiz Research

Full report by Wandile Sihlobo available in the attachment.