Industry body the Agricultural Business Chamber (Agbiz) says South Africa’s summer crop has not been as bad as some feared at the start of the 2021/22 production season, when heavy rains threatened yields.

For example, the Crop Estimates Committee estimates the maize harvest at 14.7-million tonnes, and albeit down 10% year-on-year, the harvest is still well above the ten-year average of 12.8-million tonnes.

Agbiz attributes the lower year-on-year production to fewer area plantings and expected lower yields in particular regions.

South Africa will in all likelihood remain a net exporter of maize in the 2022/23 marketing year, which starts in May.

The soybean harvest is estimated to be even less impacted, likely down by 1% year-on-year to 1.9-million tonnes this season, which is still the second-largest harvest on record.

Sunflower seeds will also likely achieve the second-largest harvest on record, increasing by an estimated 42% year-on-year to 959 450 t.

“The improvement in the sunflower seed harvest, and indeed the entire vegetable oils market, comes at an opportune time when there are worries of supply constraints globally in coming months, owing to the prevailing war in Ukraine and the country’s lower sunflower oil exports,” Agbiz chief economist Wandile Sihlobo explains.

These constraints add to pre-existing supply challenges in the vegetable oil market caused by a poor palm oil harvest in Indonesia, as a result of drought conditions.

“Therefore, the increase in South African output will slightly lessen the country’s reliance on imports, but there will nonetheless remain a significant requirement for palm oil imports,” Sihlobo notes.

Agbiz says estimates for ground nut production are also looking more positive than expected at 74 250 t for the season, up 15% year-on-year, while dry bean output is anticipated to remain unchanged at 59 690 t.

The industry body mentions that sorghum is one of the only crops that experienced a sharp decline, with estimates of a 36% year-on-year decline to 137 220 t. This is lower than the ten-year average harvest of 150 990 t, mainly owing to declining area plantings, as some hectares were switched to sunflower seeds.

Sihlobo says the broadly optimistic production data will, nonetheless, have minimal impact on prices. As with the previous few years, the domestic grains and oilseeds prices primarily follow the global markets, where the Russia/Ukraine war worries continue to put upside pressures on prices, which reflect in the South African grains market.

“Still, the fact that supplies improved provides comfort as far as the availability of essential grains is concerned. The upside price movements bode well for farmers in areas that did not experience much crop damage.

“They stand to benefit from slightly higher grains, and oilseeds prices and the higher prices are negative for consumers. With that said, the scale of the impact of these developments on South Africa's consumer food price inflation is yet to be precise.”

For now, Sihlobo says, Agbiz maintains a view that consumer food price inflation will average 6% this year.  

The base effects and possibly softer meat and fruit prices over the coming months will also play a constructive role in the consumer food price inflation path.