PERIOD UNDER REVIEW: May 2018 Compiled by Maliviwe Makeleni

South African Grain Market

On 31 May 2018, the WEAT futures contract traded at R3808 per ton for physical deliveries to

take place in June 2018. The WEAT May18 contract traded 15% y/y or R672 lower per ton

compared to the same period traded in the previous year. Whilst the WEAT May18 contract

traded 3.3%, m/m or R126 per ton higher in relation to the contract traded in the previous

month (SAFEX, 2018).

Table 1.1: Mark-to-market prices for the Summer Crops and Winter Cereals as traded on SAFEX

MTM-Prices (31/05/2018) - expressed in

Rand/MT

Month

end

R/MT (31/05/2

017)

Year-

on-Year

Chang

e

Month

end

R/MT (31/04/1

18)

Month

end

R/MT (29/03/1

8)

Commodity/ Delivery Date

June18

Jul 18

Sep 18

Dec 18

Mar 19

May 19

Jul 19

May-17

May 17 vs 18

May-18 April-18

Wheat (RFTN)

3808

3863

3870

3860

-

-

-

4480

15%

3895

3769

White maize

2120

2125

2180

2259

2300

2340

2365

1763

20%

2037

1881

Yellow maize

2208

2232

2278

2357

2377

2364

2373

1893

18%

2148

1961

Sunflower

4590

4644

4781

4900

4906

-

-

4582

0.2%

4511

4620

Soybean

4476

4537

4635

4752

4852

4864

-

4493

0.4%

4681

4465

Sorghum

-

3010

-

-

-

-

-

2850

6%

3223 (Dec 2018)

3230 (May 2018)

Source (SAFEX, 2018)

Rainfall 20 -26 June 2011

The estimated maize is 23% smaller than the 2017 crop. The 4th crop estimate for 2018 crop

signifies an output of 12,908 million tons. On the same date, white Maize traded R2120 per ton,

which means a 20.25% year-year (y/y) gain per ton obtained of white maize for a corresponding

contract traded during this this time of the year in 2017 (SAFE, 2018). A decrease of 33.14% y/y

or 3.286 million tons of white maize compared to last year’s harvest of 9.9 million tons during the

same period (NCEC, 2018). We are starting to see the increase in prices of white maize as the

production is estimated to be lower this year compared to last season. Yellow maize followed

the same trend with 10.24% y/y or 706 850 tons decline of production compared to last year’s

harvest of 6,904 mill. tons. The YMAZ May18 traded at R2208 per ton, which equates to 18% y/y

more for the same period last year (SAFEX, 2018).

Sunflower output is expected to remain unchanged at 792255 tons in relation to the previous crop

estimate, representing a 9% y/y or 8745-ton increase in relation to the previous production season

(NCEC, 2018). Accordingly, sunflower prices bounced back in response to market dynamics and

traded at R4590 per ton on 30 April 2017 whilst recovering to R4620 per ton on 31 May 2018(SAFEX,

2018).

Soybean futures was stable at R4, 476 per ton as per the May18 contract (SAFEX, 2018). This

translates in a 0.3% y/y or R17 per ton lower in relation to the same contract traded in the previous

year (SAFEX, 2018). The 4rd soybean crop estimate remain unchanged at 1, 43 million tons, it is

8.69% y/y or 111 300 tons higher in relation to the previous year’s harvest (NCEC, 2018).

Sorghum futures traded at R3010 per ton, translating into a 5.6% y/y or R160 per ton increase in

relation to the futures contract traded within the same period within the previous year (SAFEX,

2018). A reduction of 68,930 tons or 45.35% y/y is estimated for the 2017/18 sorghum production

season, which can be attributed to the 32% y/y or 13,550-hectare decrease in the area planted

(NCEC, 2018).

On the other hand, a slight increase of 300 hectares of groundnuts has been planted for the

2017/18 season which will boost harvest in the 2017/18 production by 11,200 tons (NCEC, 2018).

The dry bean production estimate is however slightly negative, as it anticipated that it would

decrease by 4.25%.

12. WINTER CEREAL PRODUCTION ESTIMATES: 2018 SEASON

The estimated total production figures by the NCEC were revised using the published figures of

SAGIS of actual deliveries as the basis for the calculations. Comparing the final calculated crop

figures with the numbers set by the CEC during February 2018, the size of the commercial wheat

crop is now 1 524 000 tons, which is 10 250 tons or 0,67% more than the final crop estimate figure

of 1 524 750 tons. For malting barley the recalculated crop size is 307 000 tons, which is 64 tons or

0,02% less than the final crop estimate figure of 307 064 tons. The final recalculated canola crop

estimate figure is 93 468 tons, which is slightly higher (32 tons or 0,03%) than the final crop estimate

of 93 468 tons (SAGIS, 2018).

1.3. Producer Deliveries

Weekly producer deliveries for wheat

Source (SAGIS, 2018)

As from 28 April 2018 until 01June 2018, an additional 8652 tons of wheat has been delivered to

the market (SAGIS, 2018). As a result, the progressive deliveries amounted to 1,482 million tons,

which represents a 97.25% delivery rate in relation to the crop estimate of 1,524,750 tons (SAGIS &

NCEC, 2018). There were more deliveries compared to the month of April by 39% meaning there

were more tons delivered during the month of May. There was a significant adjustment made on

week 34 with about 1922 tons.

1 490 000

1 495 000

1 500 000

1 505 000

1 510 000

0

1 000

2 000

3 000

4 000

28/04 -04/05/2018

05/05 -11/05/2018

12/05 -18/05/2018

19/05 -25/05/2018

26/05 -01/06/2018

Week Total vs Progressive Total

Week Total Progrssive Total

Maize

Source (SAGIS, 2018)

As from 28 April to 01 June 2018, a total of 330 289 tons of white maize and 585480 tons of yellow

maize was delivered to the market (SAGIS, 2018). These are new deliveries for the 2018/19

marketing season starting from 01 May 2018 to 30 April 2018. The crop estimate from white and

yellow maize is 6 701 260 tons and 6 207 350 tons respectively. Subsequently, this led to a 5%

delivery rate for white maize and 9.4% delivery rate for yellow maize (SAGIS, 2018).

0

50 000

100 000

150 000

200 000

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

28/04 - 04/05/2018 05/05 - 11/05/2018 12/05 - 18/05/2018 19/05 - 25/05/2018 26/05 - 01/06/2018

Weekly Producer deliveries for white maize

Week Total Progressive Total

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

0

100 000

200 000

300 000

400 000

500 000

600 000

700 000

28/04 - 04/05/2018 05/05 - 11/05/2018 12/05 - 18/05/2018 19/05 - 25/05/2018 26/05 - 01/06/2018

Weekly producer deliveries for yellow maize

Week Total Progressive Total

1.4. Exports, Imports and Re-exports

Table 2a: Wheat trade for the 2017/18 marketing season, according to tons (SGIS, 2018)

Progressive wheat exports 2017/18 47502

Wheat exports during the reporting period 10056

Importing countries Share in RSA

exports

Zambia 53

Swaziland 20

Namibia 14

Botswane 13

Zimbabwe 1

Source (SAGIS, 2018)

Supply and the demand estimates 2017/2018 wheat marketing season

The total wheat supply estimate is currently standing at 3 786 424 million tons for the 2017/18

marketing season. The largest portion thereof will consist of imported wheat, which is estimated at

50.97% or 1,930 million tons of the total supply and a surplus of 10 000 tons during the 2017/18

marketing season which is ending on 30 September 2018 (NAMC, 2018). In addition, producer

deliveries are only expected to contribute 39.75% or 1 505 million tons of the total supply for the

corresponding marketing season, in addition to the stock (9% or 341,424 tons) that was carried

over from the previous season (NAMC, 2018).

On the demand side, the 3,268 900 tons required for the local and export market changed slightly

in relation to the previous reporting period (NAMC, 2018). 96% of the local market requirement is

for human processing within the local market, whereas the export requirements estimated was

adjusted to 2% or 85,000 tons (NAMC, 2018). The closing stock is estimated to end-off at 517,524

ton (SAGIS, 2018). The retention stock is expected to last for at least 2 months or 60 days (NAMC,

2018).

In addition, Zambia was the leading export destination for South African wheat with a share of

53%, followed by Swaziland (20%), Namibia (14%), Botswana (13%) and Zimbabwe (1%) during the

reporting period.

Table 2b: Maize trade for the 2018/19 marketing season, according to tons Source:

SAGIS, 2018

Progressive maize

exports during the

reporting period:

2017/18

White maize:

67 172

Yellow maize:

328 753

No imports – due to

bumper crop

harvested during the

current production

season Maize exports during

the reporting period:

(28 April to 01 June

2018)

40 281

227 146

Importing countries Share in white maize

exports

Share in yellow

maize exports

White Maize

exports

during the

reported

period, from

28 April to 25

May 2018,

about 17 576

tons was

exported via

the Durban

harbour.

Botswana 47 1

Mozambique 18 1

Namibia 13 1

Lesotho 12 -

Swaziland 6 3

Vietnam - 24

Korea, Rep of - 24

Italy - 23

Taiwan, Prov of

China

- 23

Source, (SAGIS, 2018)

During the 2018/19 marketing season, the total supply of maize is estimated to amount to 16 281

803 tons. White maize is expected to contribute 55.2% of the total maize supply while yellow maize

represents 45%. Worth noting is the fact that the opening stock levels for white and yellow maize

were almost 50% lesser than the stock levels within the corresponding period last year (NAMC,

2018). However, due to the bumper maize crop, no imports were required as there was no shortfall

within the domestic market (NAMC, 2018).

On the demand side, a total of 13 140 000 tons of maize is required to meet the demand within

the domestic and export market (NAMC, 2018). However, the largest share thereof is for local

market requirements at 10, 790 00 tons of which 61% is for white maize and 39 % for yellow maize

(NAMC, 2018). Export market maize requirements are estimated at the decrease by 5.2 % y-o-y or

129 111 tons and amount to 2,525 million tons of which white maize exports is estimated at 30.6%

or 720 000 tons and yellow maize exports at 69% or 1,630 million tons (NAMC, 2018). The closing

stock for maize is thus expected to close on 3,141 million tons at the end of April 2018 (NAMC,

2018). This equates to 553 390 tons or 15 % y-o-y lesser than the closing stock reported for the

corresponding period in the previous marketing season (NAMC, 2018). White maize will constitutes

54% thereof, whilst yellow maize will constitutes 46% of the projected closing stock (NAMC, 2018).

The retention capacity would thus amount to 3.1 months’ worth of white maize and 4.4 months of

yellow maize considering the processing requirements of 542,750 tons of white maize and 330,667

tons of yellow maize within the local market (NAMC, 2018).

During the reporting period, the main exports destinations for South African white maize are

Botswana (47%), Mozambique (18%), and Namibia (13%) with a combined share of 78 percent.

On the other hand, Vietnam), Italy, Korea, Rep, and Taiwan altogether absorbed the largest share

of South Africa’s yellow maize exports (94%) during the period under review (SAGIS, 2018).

2. WEATHER ADVISORY ON THE 2017/2018 SUMMER SEASON, May 2018 Figure 3.1: Vegetation Conditions Index for April and May Above-normal vegetation activity occurred over the Free

State, North West and Gauteng and in distinct areas of

KwaZulu-Natal, Limpopo and Mpumalanga compared to

the long-term mean. Meanwhile, below-normal

vegetation activity persists in the Western Cape and

Eastern Cape, and isolated areas of Northern Cape and

Limpopo.

The VCI map for April indicates below-normal vegetation

activity over most of the Western Cape, in some isolated

areas of the Northern Cape, mainly in the southwest, the

western region and distinct parts of the Wild Coast and Berg

areas of the Eastern Cape and in a few distinct areas of

Limpopo compared to the long-term me

Drought remains in the province and conditions are not

conducive for establishing crops in the various areas. The

overall water level of state dams in the province remained critically low even though it’s a percent

higher compared to the previous year, 19% in 2018 and 18% in 2017 (DAFF, 2018). The two largest

dams, namely the Theewaterskloof (479.3 million cubic meters) and the Brandvlei (286.1 million

cubic meters) respectively stood at 20.9% and 18.8.8% during 18 June 2018, compared to 16.7%

and 14% during the corresponding period last year (DWS as cited by Elsenburg, 2018).

Alternatively, visit the Elsenburg Website at http://www.elsenburg.com/agri-tools/western-cape-

dam-levels to obtain the most recent update on dam levels within the Western Cape (Elsenburg,

2018).

Strategies to mitigate climatic change and related disasters

A comprehensive list of strategies can be retrieved from the monthly NAC Advisory report issued by DAFF: Climate

Change and Disaster Management. Access the mentioned list from the following websites: www.daff.gov.za and

www.agis.agric.za .

Request weather warning notifications from the Western Cape Department of Agriculture: Sustainable Resource

Management, Disaster Risk Management, by forwarding an email to Mrs. Zaibu Arai to ZaibuA@elsenburg.com or

alternatively call (021) 808-5368. Source: DAFF National Agro-meteorological Committee (NAC) Advisory, 2018.

Additional sourced to information regarding climatic conditions, can be obtained in the monthly Agri-Outlook reports Click here to view the monthly Agri-outlook reports. The Agri-outlook report provides a summative overview of both climatic and agricultural

conditions in the Western Cape, through reference to information regarding the rainfall, temperatures, dam levels, plant growth conditions as

well as climatic forecast within a particular period. Alternatively visit the Elsenburg Website www.elsenburg.com and go to Agri-tools Agri-

Outlook (Elsenburg, 2018).

3. Economic Reviews

After growing by 3, 1% in the fourth quarter of 2017, the South Africa economy wobbled in the first

quarter of 2018, shrinking by 2,2% quarter-on-quarter (seasonally adjusted and annualised).

Agriculture, mining and manufacturing were the main contributors to the slowdown, with the

electricity, construction and trade industries also recording negative growth.

After recording four consecutive quarters of robust growth in 2017, the agriculture industry lost

ground in the first quarter of 2018, contracting by 24,2%, the largest quarter-on-quarter fall since

the second quarter of 2006.

Agriculture’s relatively strong performance in 2017 is one of the positive factors that helped keep

the economy afloat in 2017. This momentum failed to carry through to 2018, with decreased

production in field crops and horticultural products contributing to the decline in the first quarter.

Figure 4.1. Exchange Rate in relation to major currencies

Source (SARB, 2018)

During the month of May and June 2018, the ZAR exchange rate weakened against the major

global currencies such as the US dollar (USD), Great Britain Pound (GBP) and Euro (SARB, 2018).

The rand weakened by 3.6% and 5.4% respectively m-o-m against the dollar and traded by R12.53

in May and R13.21 in June 2018. The GBP/ZAR appreciated by 0.9% in May and appreciated by

4.2% in June m-o-m and EUR/ZAR traded 0.3% in May and appreciated by 4.2% in June m-o-m.

4. Energy

Table 5.1.: Basic fuel Price adjustments

Product Description Numerical adjustment

applicable to the coast

parts in South Africa

Price adjustment Description The average price

applicable to the

coastal parts of South

Africa

Petrol 93 ULP 82 cents per litre increase in the

retail price

1505.00

Petrol 95 ULP & LRP

82 cents per litre increase in the

retail price

1520.00

Diesel 0.05% Sulphur

85 cents per litre increase in the

retail price

1370.030

Illuminating Paraffin

(Wholesale)

82 cents per litre increase the retail

price

866.588

LPGAS (maximum retail

price)

138 cents per litre increase in the

retail price

2318.00

0,00

5,00

10,00

15,00

20,00

Performance of South African exchange rate against major global currencies

02 May- 25 June 2018

USD

EURO

GBP

The Department of Energy has published its official price adjustment of fuel prices. Confirming an

increase of 82 cent cents per litre from both 93 ULP and 95 ULP & LRP, while diesel jumped by 85

cents. The illuminating Paraffin increased by 82 cents.

The average international product prices of Petrol and Diesel and Illuminating Paraffin increased

during the period under review. The Rand depreciated against the US Dollar during the period

under review, on average, when compared to the previous period. The average Rand/US Dollar

exchange rate for the period 25 April 2018 to 31 May 2018 was 12.5099 compared to 11.9797

during the previous period. This led to a higher contribution to the Basic Fuel Prices on petrol, diesel

and illuminating paraffin by 30.46 c/l, 31.17 c/l and 31.53 c/l respectively (DoA, 2018).

ACKNOWLEDGMENTS

The below-listed sources are acknowledged, as cited in this publication:

Agricultural Produce Agents Council (APAC): www.apacweb.org.za

Agricultural Research Council (ARC): www.arc.agric.za

Department of Agriculture, Forestry and Fisheries (DAFF): www.daff.gov.za

Department of Energy (DoE): www.energy.gov.za

Department of Water & Sanitation (DWS): www.dwa.gov.za

Elsenburg (Western Cape Department of Agriculture): www.elsenburg.com

Organization of the Petroleum Exporting Countries (OPEC): www.opec.org/opec

Potatoes South Africa: www.potatoes.co.za

South African Government: www.gov.za

South African Reserve Bank (SARB): www.sarb.gov.za

South African Revenue Services (SARS): www.sars.gov.za

Statistics South Africa (Stats SA): www.statssa.gov.za

Techno Fresh CRM: www.technofresh.co.za

For more information, contact:

The Western Cape Department of Agriculture

Programme: Agricultural Economic Services

Division: Marketing and Agribusiness

Tel: 021 808 5193 or 5189

Fax: 021 808 5210

E-mail: maliviwem@elsenburg.com

DISCLAIMER: The Western Cape Department of Agriculture has compiled this document and its

contents. The views expressed in this document are those of the Department of Agriculture with

regard to vegetable market information in the province unless otherwise stated. Anyone who uses

this information does so at his/her own risk. The Department of Agriculture or the author(s) therefore

accepts no liability for losses incurred resulting from the use of this information.