It seems like the global agricultural observers have not fully factored in the possible effect of a weak El Niño in their grain production forecasts, specifically on South Africa.
First, it was the International Grains Council at the end of last month which left its estimate for South Africa’s 2018/19 maize production unchanged from the previous month at 12.3 million tonnes. Last week, the United States Department of Agriculture followed suit, leaving its estimate for South Africa unchanged from last month at 13 million tonnes.
Essentially, I had viewed the International Grains Council’s (IGC’s) estimate as tentative since there were no conclusive views about the weather outlook when the estimate was released. But for the United States Department of Agriculture, things are a bit different as we had already learned from a number of weather forecasters of possible dryness by the time the agency released its estimate.
So what do we make of all this?
I agree that forecasters need to contend with much uncertainty on the weather front, which makes it difficult to come up with crop production estimates. However, I feel that the most plausible indicator to look out to at this point is the “intentions of farmers to plant data” which is due for release by the Crop Estimate Committee next week, 25 October 2018.
It would also be useful for one to keep an eye on the South African Weather Service Seasonal Climate Watch website, which is typically updated regularly to provide a short-to-medium term weather view.
Given all this, should the South African consumer be concerned?
The short answer is no. Good people, life goes on, this is all nature and we cannot control it in the immediate term. On a more seriously note, this doesn’t pose an immediate risk in terms of maize supplies – thanks to large carryover stocks from the previous season.
You see, as a country, we consume about 10.8 million tonnes of maize a year. If I were to be pragmatic by factoring in a possible weak El Niño, and work with an estimate that is slightly lower than that of the International Grains Council’s maize production estimate of 12.3 million tonnes, South Africa would still remain a net exporter of maize until April 2020. For as long as our production level, plus carryover stocks exceed domestic demand. We will probably have about 3.3 million tonnes of carryover stocks when the 2019/20 marketing year starts in May 2019. Hence, South Africa’s maize supplies will be in good shape over the next two years, all else being equal.
Follow me on Twitter (@WandileSihlobo). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
