South Africa

GIEWS Country Brief: South Africa (05-November-2021)

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FOOD SECURITY SNAPSHOT

• Positive production outlook for 2022 cereal crops, reflecting large acreage expectations and forecasts of favourable seasonal rainfall

• Record cereal outturn estimated in 2021, bolstering national stocks and maintaining above-average exports of maize in 2021/22 marketing year

• Prices of maize declined moderately on account favourable supplies and declining international benchmark prices

Cereal acreage expected to remain high in 2022

Planting intentions for the 2022 summer cereal crops, currently being sown, indicate an above‑average acreage. The key factors underpinning the good expectations are the remunerative domestic grain prices and favourable weather outlook that points to a higher probability of average to above‑average rainfall amounts throughout the cropping season. However, the prevailing high input prices, including fertilizers that account for about one‑third of a farmer’s input cost, have dented profit expectations for grains and consequently are anticipated to prevent an expansion in the acreage this year.

Monthly cumulative rainfall amounts in October, the start of the planting period, have been near average in the main cereal producing provinces and, with soil moisture at adequate levels, are expected to favour crop establishment.

Record cereal output in 2021

Cereal production in 2021, including a forecast for the winter wheat crop currently being harvested, is pegged at 19.7 million tonnes, a record outturn. Most of this output is comprised of maize, estimated at 16.8 million tonnes, about 3.5 million tonnes above the five‑year average. The large maize harvest reflects a well above‑average sown area and excellent weather conditions throughout the season that maintained above‑average yields. Wheat production is forecast at an above‑average level of 2.1 million tonnes and almost unchanged on yearly basis. Barley production, also grown in the winter months, is forecast to decline year on year in 2021, as the COVID‑19‑related restrictions on alcohol sales decreased demand for the grain and induced farmers to scale back the barley acreage.

Large maize export quantity forecast in 2021/22

Exports of maize are forecast at an above‑average level of 2.9 million tonnes in the 2021/22 marketing year (May/April), underpinned by a favourable supply situation following the bumper output in 2021 and ample stocks built‑up from the large harvest in 2020. The export forecast has, however, been cut back moderately compared to earlier expectations, reflecting large maize outturns in neighbouring countries, particularly in Zimbabwe, which have in turn reduced their export demand for South African grain. As of October 2021, half‑way through the marketing year, about 1.9 million tonnes of maize were exported, mostly yellow maize to Asian countries.

Prices of maize declined on supply pressure

Wholesale prices of maize grain have gradually declined since the start of the year and, in October 2021, they were at comparable levels year on year. The decline is mostly due to the large domestic supplies, which have generally outweighed the upward pressure from the high international benchmark prices and resulted in domestic prices trading near or below the export parity levels since May. As early production prospects point to another bumper harvest in 2022 and benchmark international maize prices have fallen in recent months, the declining trend of domestic wholesale prices is expected to continue in the coming months.