Positive outlook for 2018/19 agricultural crop

SOUTH Africa’s short-term seasonal outlook remains positive for the 2018/19 crop in spite of the developing El Niño weather pattern, while good winter rains in the Western Cape have boosted agricultural recovery in the province.

This is according to FNB’s senior agricultural economist Paul Makube.

Makube said South Africa’s agriculture outlook was increasingly weather-dependant going forward, and the eastern parts of the country had a good start to the crop season, with yellow maize and soya bean plantings receiving adequate moisture. This while the rest of the province’s areas still experienced dryness that has caused delays in the planting of summer crops and further deterioration in grazing conditions in parts of the western and central livestock areas.

“Nonetheless, short-term forecasts still call for rains in most growing areas towards mid-December. Further, the western areas still have sufficient time to plant until early January,” said Makube.

He said although gaining some strength recently, significant rand volatility would continue within a wide trading range and the mediumto-longer term outlook showed that depreciation would resume.

Makube said this would boost revenues of traditional exportable agricultural products such as wine and fruit, whose seasonal production outlook had improved.

“Given the large domestic supplies from the 2016/17 and 2017/18 production seasons, South Africa is expected to remain a net exporter of most agricultural commodities, except for wheat,” said Makube.

He added that good winter rains had boosted agriculture recovery in the Western Cape with dams filling up and soil moisture replenished to good levels.

“The estimate for the 2018 winter crops so far indicates a harvest of 2.38 million tons, up 23 percent year-on-year (y/y) with wheat, which accounts for 78 percent of this total increasing by 21 percent y/y to 1.86 million tons, thereby reducing South Africa’s import requirements.

“In spite of the developing El Niño weather pattern, the near-term seasonal outlook remains positive for the 2018/19 crop, with good start in the eastern production areas and rains forecast for the near term,” said Makube.

Carl Opperman, the chief executive of Agri Western Cape, said the outlook for the Western Cape looked more favourable, with agriculture’s water restrictions that had been lifted from 60 percent to 10 percent from December 1.

“It will help the sector a great deal with recovering from damages caused by the severe water shortages of the past months. If the restrictions remained at 60 percent, crops would not have been able to recover. The available water means post-harvest irrigation for vineyards and orchards is now possible for 2019, and it will definitely have an effect on the 2019/2020 crops (no post-harvest irrigation was possible during the 2018 season),” he said.

Opperman added that livestock producers in the province were still struggling, with the Klein Karoo, Central Karoo and West Coast regions still dependent on drought assistance and feed donations.

“The recovery in the pork market continues due to stable to strong demand as the listeriosis and the African Swine Fever (ASF) problem have so far been addressed. Although domestic prices are significantly down on last year, the current porker and baconer prices have risen by 34 percent respectively from the April lows,” said Makube.

Meanwhile, the South African Table Grape Industry (Sati) released the first crop estimate for the 2018/19 season, with volumes estimated to be between 63.2 and 70.1 million cartons (4.5kg equivalent).

Sati said good winter rains had largely broken the severe drought in the Western Cape and this positive outlook, linked to new plantings and new cultivars, was bringing the South African table grape industry back on its “organic” growth trend over the past four years. According to Sati chairperson Fanie Naudé, these were all positive signs for the coming season.