The recent rains across South Africa have been favourable for the country’s 2023/24 winter crops, according to the Agricultural Business Chamber (Agbiz).
Wandile Sihlobo, the chief economist at Agbiz, said yesterday that crops were mostly in good condition in the Western Cape, a province that accounted for over two-thirds of the winter wheat, barley, canola and oats plantings.
“The heavy rains in June in the region, which damaged infrastructure, had a minimal adverse effect on the overall winter crops. Admittedly, certain areas received excessive moisture that may have stunted crops in some fields,"” Sihlobo said.
The feedback from various conversations with producers in the province suggested that the country could receive above-average yields in winter crops.
“Other notable winter crop-producing provinces, such as the Northern Cape, Free State and Limpopo, also have good soil moisture from the summer rainfall, which is now beneficial for winter crop growing conditions. Notably, the weather conditions have also been much colder this winter, supporting crop conditions,” he said.
The agricultural organisation said it was also worth noting that South Africa’s winter crop production conditions this 2023/24 season were better than the previous one with regards to input costs.
For example, when farmers started to prepare for the season in March this year, the essential agrochemicals, such as glyphosate and acetochlor, were down by 36% year on year (y/y) and 18% y/y, respectively, in rand terms. In the same month, the essential fertilisers, such as ammonia, urea, di-ammonium phosphate and potassium chloride, were down 45%, 54%, 18% and 28% in rand terms, respectively.
“These price changes in agrochemicals and fertilisers are vital as they impact vast components of the grain input costs. Fertiliser accounts for a third of grain farmers’ input costs, while other agrochemicals account for roughly 13%. This means that a decline in the prices of these inputs considerably improved the production conditions in terms of costs for farmers in the 2023/24 winter crop season.”
On Wednesday the South African Crop Estimates Committee (CEC) will release the preliminary area estimate of winter crops.
Sihlobo said Agbiz thought the area would be roughly unchanged, if not having improved, from the intentions to plan data released at the end of April. At the time, the CEC noted that farmers intended to plant 542 600 hectares of wheat in the 2023/24 season, 3% up from the five-year average area tilled (although down 4% y/y).
“In our view, such an area planted, combined with favourable weather conditions as we have observed, would yield a solid harvest of 2.03 million tons (down 4% y/y). We assumed an average yield of 3.75 tons per hectare, which is a possibility if the weather conditions remain favourable throughout the season. The decline in the overall yield is linked to a possible area reduction in the Free State and Northern Cape, while the Western Cape will likely have solid output.”
Sihlobo said while various regions of the world had struggled with excessive heat, such as in parts of Europe, the winter wheat regions of South Africa had had favourable production conditions thus far, and the benefit of this would be apparent in the crop size. Although the country would receive the planting data this week, he said it would be a month before it had the first production forecast that the CEC would release on August 29.
With renewed worries about the wheat supplies and a potential uptick in prices because of the non-renewal of the Black Sea Grain Deal, a decent domestic wheat harvest provided a much-needed buffer in terms of supplies.
“South Africa will remain a net importer of roughly half of its domestic wheat consumption, a volume of around 1.5 million tons; still having a sizeable domestic supply helps for the near-term wheat usage in fragile grain trade times as we witness worldwide. Therefore, the favourable rains and farmers’ efforts may have provided a much-needed buffer through the 2023/24 season wheat supplies,” he said.
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