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Country Briefs

  South Africa

Reference Date: 27-June-2018


  1. Maize production in 2018 forecast to decline, but to remain higher than average

  2. Supply situation expected to be favourable in 2018/19, partly reflecting well above-average opening stocks

  3. Maize prices strengthened in recent months due to weaker currency and higher international quotations

Maize production in 2018 forecast to decline, but remain above average

Under generally favourable weather conditions, harvesting of the 2018 maize crop is expected to be completed in western regions in June, while the harvest was finalized in eastern areas in May.

Although total cereal production is forecast to decline by 18 percent in 2018 from the record high of 2017, this year’s harvest is still expected to remain above average. The bulk of the contraction in the cereal output is related to maize, with production forecast at 13.4 million tonnes, 20 percent lower than last year. The anticipated decrease is mostly a result of a price-induced contraction in plantings – total commercial maize plantings decreased by 12 percent on a yearly basis – and lower yields, due to an extended period of below-average rainfall in January and early February. Rains, however, improved in late February, averting a larger decline in yields relative to the previous year.

For the winter wheat crop, which is expected to be harvested from October, recent favourable rains in the main western growing regions improved soil moisture levels and benefitted crop development. Furthermore, continued favourable rains are predicted over the main wheat-producing Western Cape Province for the next three months (July-September), boosting the production outlook. Although early in the season, production is foreseen to slightly increase compared to the below-average output of the previous year.

Domestic supplies forecast to remain favourable in 2018/19

Domestic maize supplies are estimated at a well above-average 17.7 million tonnes in the 2018/19 marketing year (May/April), which also significantly exceeds the annual domestic needs of about 11.5 million tonnes. The good supply situation reflects both the above-average harvest and large stocks.

Reflecting the ample supplies, maize exports are forecast to remain nearly unchanged compared to the previous year, forecast at an above-average level of 2.4 million tonnes in 2018/19. Since the start of the marketing year, maize exports have reached almost 400 000 tonnes, 45 percent more than last year’s volume over the same period (May to mid-June). The current higher export rate reflects large volumes shipped to East Asian countries, particularly to Viet Nam.

Closing stocks at the end of 2018/19 marketing year are forecast at 4 million tonnes, 7 percent less than last year, but still well above the previous five-year average.

Prices of maize strengthened in recent months

Prices of maize have been increasing steadily – around 5 percent each month – since February 2018 and, as of May, they were about 20 percent above their year-earlier levels. The price trend reflects the upward pressure from a weaker currency and higher international quotations, while earlier concerns related to the dry weather conditions also contributed to pushing up prices. However, prices of maize still remained at relatively low levels on account of the continued good supply situation that curbed larger price gains in 2018.

For wheat, prices were 12 percent down on a yearly basis as of May, mostly reflecting favourable production prospects in 2018.

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