SA Weather Service flags a likelihood of El Niño occurrence in 2018/19

• Yesterday the South African Weather Service expressed a similar message to the International Research Institute for Climate Society about the probability of El Niño occurrence in the 2018/19 production season, which commences in October 2018. But, the agency also cautioned that “it is still too early to determine the potential impact of the predicted El Niño event; however, the typical effects are drier and warmer conditions for the summer rainfall areas during summer”.
• We will keep a close eye on the developments over the coming months in order to ascertain the impact of this on next season’s crop production. In the near term, this will possibly have minimal impact on maize prices until there is some level of confidence or clarity on the estimates, which should be in the space of a month or two.\
• South Africa’s maize supplies for the 2018/19 marketing year are in good shape, estimated 16.7 million tonnes, which is well above the local demand of 10.8 million tonnes, according to data from the national Supply and Demand Estimates Committee. The supplies figure includes an opening stock and expected production. This could keep SAFEX maize prices under pressure in the near term.
• In terms of trade, South Africa exported 75 115 tonnes of maize in the week of 20 July 2018, down by 20 percent from levels seen in the previous week. About 93 percent was yellow maize, with 7 percent being white maize.
• The leading buyer was again Taiwan, with a share of 74 percent of the weekly exports. Trailing Taiwan was Vietnam with a share of 15 percent of weekly exports. The rest went to regional markets. Overall, this placed South Africa’s 2018/19 maize exports at 838 925 tonnes, which equates to 34 percent of the seasonal export forecast of 2.5 million tonnes.

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