The weather and trade policy remain topical issues in SA wheat market
South African Agricultural Commodities Weekly Wrap
June 22, 2018
All eyes on the CEC’s fifth summer crop production estimates
June 27, 2018
The weather and trade policy will remain topical issues in the South African wheat market for some time. From a weather perspective, the new season crop is still in its early stages of development which needs moisture, therefore we will continue to monitor the weather developments over the next couple of months.
In the past few weeks, the Swartland and Overberg regions of the Western Cape province received good showers, hence the winter wheat crop is a fair condition in these particular regions. Meanwhile, the Southern Cape region, particularly Mosselbay and Heidelberg, have not received notable rainfall since the start of the season, hence the winter wheat crop is not in good condition in the region. This week might not bring any improvements in the Southern Cape region as weather forecasts show a possibility of light and scattered showers over the Western Cape province, varying between 10 and 20 millimetres.
This is not only a concern for Southern Cape farmers, the rainfall received in areas such as Swartland and Overberg in the past couple of weeks have been helpful in terms of sustaining the crop and improving topsoil moisture, but the province still needs intense and persistent rainfall. This will help to replenish subsoil moisture and subsequently, benefit the winter wheat crop over the coming months.
In terms of trade policy, the import tariff matters will continue to dominate the market as imports are set to reach the second highest level on record in the 2017/18 marketing year. On 12 June 208, the wheat import tariff triggered to a new rate of R281.74 per tonne, which is 36 percent lower than the current rate. This adjustment followed an uptick in global wheat prices in the past couple of weeks, due to unfavourable weather conditions in parts of the Black Sea and the EU regions.
The newly triggered rate of R281.74 per tonne has not yet been published on the government gazette, and will only be applicable after its publication. The timeframe for this process is unclear, but previous adjustments took more than three weeks.
