South African wheat sowings show rare increase

28.07.2016

South African wheat sowings have risen – slightly - for a second season for the first time in 15 years, in part at the expense of barley and canola, staving off, for now, a long-term trend of declining area.

South African growers 486,350 hectares of wheat for the 2016-17 harvest, up 0.9% year on year, and a second successive year of increase for the first time since 2001, the official Crop Estimates Committee said.

The area was above estimates from commentators such as the US Department of Agriculture, whose Pretoria bureau forecast seedings of 460,000 hectares.

Nonetheless, the figure was "the third smallest area planted to wheat" in South Africa on official records, the committee noted, and less than 10,000 hectares above the record low set two years ago.

'Decreasing trend in hectares'

Indeed, South African wheat sowings have been on a declined trend for at least 25 years, with area in 1990 approaching 1.6m hectares.

The drop in area has been attributed to the increased returns that growers have achieved from crops such as corn, oats, rapeseed and soybeans.

"Unless drastic technology changes occur that could improve wheat yields, the decreasing trend in hectares planted with wheat in South Africa will continue in future," USDA staff have warned.

However, improving prices, encouraged by the dent to South African grains production from drought, have boosted the financial incentive to farmers of growing wheat, with Johannesburg futures touching a multi-year high of 5,171 rand a tonne in May.

Spot futures have since fallen back to stand at 4,309 rand a tonne on Monday, undermined by weakness on international markets, to which South Africa is tied by imports which have reached 1.69m tonnes so far in 2015-16.

Maize estimates

In fact, the CEC estimated this time a retreat in area planted to malting barley, seen falling for the first time in three years, by 5.7% to 88,400 hectares.

Canola area was seen tumbling by 9.7% to a four-year low of 70,500 hectares.

Meanwhile, on summer crops, the committee nudged 100,000 tonnes higher to 7.26m tonnes its forecast for the drought-hit maize harvest, although this still represents a drop of 27% year on year.

The upgrade reflected an increase to 4.16m tonnes in the estimate for yellow maize, which is used chiefly for livestock feed, with the estimate for the harvest of white maize, a food staple, kept at 3.10m tonnes.

'Net importer'

The CEC also raised by nearly 22,000 tonnes, to 750,200 tonnes, its estimate for the South African soybean harvest.

However, with forecasts for output of dry beans and ground nuts reduced, and harvests still showing large year-on-year declines, the data were viewed as "mixed" by agribusiness industry group AgBiz.

"South Africa will be a net importer of grains and oilseeds in the 2016-17 season," AgBiz said, flagging industry estimates for maize buy-ins of 3.3m-3.8m tonnes, up from 1.97m tonnes in 2015-16, and for sorghum of 40,000 tonnes, a rise of 17% year on year.

"Additionally, the soybean import forecast stands at 265,000 tonnes, which is twofold the volume imported in the previous season," with sunflower purchases seen rising by 25% to 45,000 tonnes.


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