Spotlight on sunflower seed market

• Yesterday the national Crop Estimates Committee lifted its forecasts for 2017/18 sunflower seed production by 8 percent from last month to 858 605 tonnes. This was underpinned by higher than initially expected yields in the late-planted areas of the Free State and North West provinces. These provinces collectively account for 95 percent share of the expected harvest. Worth noting is that the average national yield this season is estimated at 1.43 tonnes per hectare, which is highest in 10-years.
• We believe that this upward revision will have minimal impact on the market as it was in line with expectations, following large producer deliveries in the past couple of weeks. In the week of 17 August 2018, about 98 percent of the estimated harvest had already been delivered to commercial silos. At midday, SAGIS will provide an update for the week of 24 August 2018.
• The expected large harvest has boosted the country’s sunflower seed supplies. The most recent data from SAGIS shows that South Africa’s sunflower seed ending stock amounted to 584 280 tonnes in July 2018, up by 26 percent from the volume seen the previous month. With that said, this is still 18 percent lower than the corresponding period last year. This is partially due to the fact that the estimated harvest is still 2 percent lower than the 2016/17 production season and the fact that a notable share of the harvest occurred earlier this month. Therefore, the stocks for August 2018 could potentially show an uptick. An update on this will be released on 25 September 2018.
• Furthermore, the improvement in production prospects implies that South Africa’s sunflower seed imports could decline in the coming month as processors will potentially rely on local supplies. This, however, will not make a meaningful impact in the market. South Africa has already imported 469 tonnes of sunflower seed in the 2018/19 marketing year, which equates to 94 percent of the seasonal expectations.

Sourced: Agbiz, Agribusiness Research

Click HERE for the full report.