agri-market insight agri -market insight sep-2015 · the second estimate for 2015/16 winter crop...

Agri-Market Insight Sep-2015

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Bringing the Insight of Market Conditions SEPTEMBER 2015

NEWS OF THE MONTH

Low Path Avian Flu hits two South African farms

Two ostrich farms have experienced an outbreak of Low Path Avian Flu in South Africa, in

Kannaland in the Western Cape Province. The flu type is identified as H5N2 serotype. One

of the farms held 494 ostriches and the other farm held 978 ostriches, with 343 cases detected

in all across both farms.

Machinery still lethargic

Tractor and combined harvester sales declined by 12.9% and 40% respectively in the month

of August. On a year-to-date basis tractor and combine harvester sales decreased by 8.8%

and 40.3% respectively compared to the same period last year.

Agri-Market Insight

Highlights

Tractor and combined harvester sales declined by 12.9% and 40% respectively in August.

The SA citrus industry recommended on the 14th of September to suspend citrus exports to the

EU. Exports to South Korea growing significantly despite CBS issue.

The domestic summer crop estimate has been revised to11.908 million tons, with revisions on

maize, sunflower seed, soybean and sorghum.

Non-commercial maize is estimates at 673 800 tons, slightly down compared to 675 000 tons in

the previous season.

The domestic grain and oilseed prices on an upward trajectory, following seasonal pattern ahead

of planting for 2015/16 season. Farmers are now gearing up for summer crop planting season,

with soil/land preparation underway.

The livestock market is traded mixed, with prices of beef, mutton and poultry increasing from a

month ago. Prices are expected to increase in the medium term as demand should improve with

festive buying.

The average market indicator mohair closed declined to R182.55/kg in the third sale of the 2015

winter season. The domestic wool market indicator closed at R124.80/kg, up by 0.3% from the

previous sale.


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Table 1: Machinery Sales

August % Change Year-to-Date

August

Change

2015 2014 2015 2014

Tractors 507 579 -12.4 3 866 4 241 -8.8%

Combine Harvesters 15 25 -40.0 157 263 -40.3%

Source: CEC

Rand weakness could lead to an increase in the price of machinery in the short to medium

term. On the upside, early rains in the past weeks has given optimism, with farmers are now

preparing land/soil for summer crop planting. Market forecasts for 2015 for tractor sales are

at 10 lower compared to last year; however combine harvester sales are expected to be 30%

lower.

Summer crop estimate revised upward

The domestic summer crop estimate has been revised to11.908 million tons, from 11.781

million tons previously. The upward revision was due to adjustments seen in white and yellow

maize, sunflower seed, soybean and sorghum. The final estimate of 11.908million tons still

falls short of the 16.451 million tons from previous season. Intentions to plant for summer crop

for the 2015/16 season will be released by the CEC on the 27th of October. Good rains

experienced in the month of September boosted market optimism for planting season; most

farmers will have started with soil/land preparation.

Table 2: Summer crop Estimates

CROP

Commercial

Area planted

2015

HA

Final estimate

2015

Tons

7th forecast

2015

Tons

Area planted

2014

HA

Final crop

2014

Tons

Change

2015 vs

2014

White maize 1 448 050 4 702 700 4 649 800 1 551 200 7 710 000 -39%

Yellow maize 1 204 800 5 238 950 5 188 700 1 137 000 6 540 000 -19.9%

Maize 2 652 850 9 941 650 9 838 500 2 688 200 14 250 000 -30.2%

Sunflower seed 576 000 660 900 656 800 598 950 832 000 -20.6%

Soybeans 687 300 1 059 850 1 041 600 502 900 948 000 11.8%

Groundnuts 58 000 56 675 56 675 52 125 74 500 -23.9%

Sorghum 70 500 116 500 114 700 78 850 265 000 -56%

Dry bean 64 000 73 390 73 390 55 820 82 130 -10.6%

TOTAL 4 108 650 11 908 965 11 781 665 3 976 845 16 451 630 -27.6%

Source: CEC


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The area planted to maize in the non-commercial agricultural sector is estimated at 395 200

ha, down by 3.14% compared last season’s 408 000 ha. The expected maize crop for this

sector is 673 800 tons, slightly down compared to 675 000 tons in the previous season.

Approximately 60% of the maize produced in the non-commercial sector is planted in the

Eastern Cape.

The second estimate for 2015/16 winter crop total is at 2.087 million tons, lower compared to last season crop. Wheat production is projected at 1.635 million tons, malting barley at 347 083 tons and canola at 105 400 tons.

Ban on citrus to EU

The SA citrus industry recommended on the 14th of September to suspend citrus exports to

the EU. This suspension excludes soft fruit and Kumquats, and citrus from Western Cape and

Northern Cape. Inspection of fruit to the EU was stopped as at 17th September. The Citrus

Growers Association (CGA) has presented a program of pre-import DAFF inspections in the

EU through one port (Rotterdam). This is an additional measure of risk mitigation to address

any possible apparent risk related to ‘floating consignments’ that will leave SA after inspection

stops on 17th September and EU market closure.

The ban is aimed at sustaining integrity for the industry, as this will help minimise the

occurrence on interceptions. Producers in affected regions, excluding than Western Cape

and Northern Cape, will need to divert products to other export regions. The export season

runs up to December (smaller volumes).

Despite the ban, CGA reported that there has been a “boom “in citrus exports for South Korea

in the current season. South Africa gained access in 2013 to export grapefruit, with total export

at 260 005 carton -, of which 67 790 were grapefruit and the rest Valencia. Currently at the

end of week 38 South Korean export volumes are heading towards a million cartons –

grapefruit accounting for 594 835 cartons. This is indicative of efforts made by industry to

make products in new and unpenetrated markets.

For the current season, cumulative intakes are at 112.7 million cartons at 15kg/carton, down

from 114.5 million in the same period in the preceding season. Lower navels and Valencia

production as a result of an “off year” in the alternate bearing season.

Table 3: Citrus Intakes & Exports To end Week 38

Million 15 Kg

Cartons

Packed Packed Packed Shipped Shipped Original

Estimate

Latest

Prediction

Final

Packed

2013 2014 2015 2014 2015 2015 2015 2014

Grapefruit 18.1 m 15.6 m 16.1 m 14.7 m 16 m 15.3 m 16.1 m 15.6 m

Soft Citrus 8.4 m 9.9 m 9.9 m 9.5 m 9.9 m 10 m 9.9 m 10 m

Lemons 10.5 m 13.1 m 14.7 m 12.8 m 14.3 m 13.6 m 15 m 13.2 m

Navels 25.4 m 25.9 m 24.5 m 25.9 m 24.5 m 25.1 m 24.5 m 26 m

Valencia 46.5 m 50 m 47.5 m 38 m 40.1 m 49.1 m 50 m 50.9 m

Total 108.9 m 114.5 m 112.7 m 100.9 m 104.8 m 113.1 m 115.5 m 115.7 m

Source: Citrus Growers Association


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GRAIN AND OILSEEDS MARKET

Maize: The USDA reported harvesting is at

18% complete as at the 28th of September,

which is below analyst expectations of 21%

complete. Prices are under pressure, as most

producers are harvesting. Good weather in

some regions is helping cap any gains.

Domestic maize prices are trending upward in

the month of September, consistent with

seasonal patterns. Currently (29 September)

white maize is trading at R3, 188/ton and yellow

maize R2, 941/ton, up by 5.9% and 5.1%

respectively. 21% compared to a month ago.

Prices are expected to increase in the short term,

and move sideways in the medium term.

1 400

1 800

2 200

2 600

3 000

3 400

3 800

Rand/T

on

Figure 1: SAFEX Maize Prices

White Maize Yellow Maize

Wheat: Concern over dry weather in the Black

Sea regions, Russia and Ukraine in particular, to

support prices upward in the short term. Prices

increases may be capped by ample wheat

supplies and strong export competition.

Domestic wheat prices are trading at R4, 120/ton

(29 September), slightly lower compared to a

month ago. Wheat prices are projected to trade

sideways in the short term, and increase in the

medium term.

Oilseed: The USDA reports that soybean

harvesting is 21% complete, above market

expectation of 18% complete. Prices are

expected to remain bearish in the short to

medium term.

The local oilseed market is following maize

prices, a seasonal pattern in the planting period

where prices are generally trading upward.

Sunflower is trading at R6, 280/ton, up by 7.3%,

and soybean at R5, 455/ton, up by 2.6% from the

previous month.

3 200

3 400

3 600

3 800

4 000

4 200

4 400

Rand/T

on

Figure 2: SAFEX Wheat Prices

3 000

3 500

4 000

4 500

5 000

5 500

6 000

6 500

Rand/T

on

Figure 3: SAFEX Oilseeds Prices

Sunflower Soya beans


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Table 4: Grains & Oilseeds

SAFEX Rand/Ton 29-Sep-2015 Month Ago 6 Months Ago Year Ago

White Maize 3188 3009 2637 1761

Yellow Maize 2941 2799 2436 1770

Wheat 4120 4133 3883 3626

Sunflower 6280 5849 4899 4452

Soya bean 5455 5316 4823 5150

Source: Grain SA

FRESH PRODUCE MARKET

This section illustrates the weekly average prices per kilogram of select vegetables traded in

Bloemfontein, Cape Town, Durban, Johannesburg and Pretoria fresh produce markets. South

Africa is a major producer of vegetables such as potatoes, tomatoes, onions and cabbages.

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

3 000 000

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

Volu

mes

Rand/K

g

Figure 5: Carrots

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

1.00

1.50

2.00

2.50

3.00

3.50

Volu

mes

Rand/K

g

Figure 4: CabbagesCabbages: Average weekly prices declined

by 6.5% from a month ago, trading at R1.30/kg

(R1, 302/ton). Volumes traded in the weeks

reported in September are currently up by

10% compared to the same period in the

month earlier.

Carrots: Average weekly prices are trading at

R2.49/kg (R2, 486/ton), up from R2.20/kg last

month. Volumes traded in the weeks reported

in September are currently up by 17%

compared to the same period in the month

earlier.


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Table 5: Fresh Produce

Potatoes: Average weekly prices decreased

by 5% from a month ago, trading at R2.72/kg


reported in September are currently 4% lower

compared to the same period in the month

earlier.

Onions: Average weekly prices down by 1%

compared to last month, trading at R2.38/kg


reported in September are slightly down

compared to the previous month.

0

1 000 000

2 000 000

3 000 000

4 000 000

5 000 000

6 000 000

7 000 000

8 000 000

0.00

1.00

2.00

3.00

4.00

5.00

6.00

Volu

me

s

Rand/K

g

Figure 6: Onions

0

2 000 000

4 000 000

6 000 000

8 000 000

10 000 000

12 000 000

14 000 000

16 000 000

18 000 000

20 000 000

0.00

1.00

2.00

3.00

4.00

5.00

6.00

Volu

mes

Rand/K

gFigure 7: Potatoes

0

1 000 000

2 000 000

3 000 000

4 000 000

5 000 000

6 000 000

0.00

2.00

4.00

6.00

8.00

10.00

12.00

Volu

mes

Rand/K

a

Figure 8: TomatoesTomatoes: Average weekly prices are up by

7% from last month, trading at R5.75/kg (R5,

746/ton). Volumes traded in the weeks

reported in August are currently 6% higher

compared to the same period in the previous

month.


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18-Sep-2015 Month Ago 6 Months Ago Year Ago

Cabbages 1.30 1.39 3.02 1.99

Carrots 2.49 2.20 4.05 2.56

Onions 2.38 2.40 3.67 2.87

Potatoes 2.72 2.88 2.95 3.87

Tomatoes 5.75 5.39 7.84 6.23

Source: FNB

LIVESTOCK MARKET Table 6: Beef Prices

Beef Price Band c/kg 25-Sep-2015 Month Ago 6 Months Ago Year Ago

Class A2 3477 3471 3400 3361

Class AB2 3324 3303 2995 3095

Class B2 3107 3106 2754 2921

Class C2 2895 2870 2510 2710

Source: RMAA

1000

1300

1600

1900

2200

2500

2800

3100

3400

3700

c/k

g

Figure 9: Weekly Beef Prices

Class AB Class B2

Class C2 Class A2/A3

Weaner

Beef: The domestic beef market traded

upward across all classes. Prices are

expected to increase in the short to medium

term, ahead of the festive season buying

frenzy.

3 000

3 500

4 000

4 500

5 000

5 500

6 000

6 500

c/k

g

Figure 10: Weekly Mutton Prices


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Table 7: Mutton Prices

Mutton Price Band c/kg 25-Sep-2015 Month Ago 6 Months Ago Year Ago

Class A2 5079 5158 5133 5307

Class AB2 4926 4871 4521 4740

Class B2 4593 4448 3680 3919

Class C2 4267 4397 3557 4007

Source: RMAA

600

1 100

1 600

2 100

2 600

3 100

c/k

g

Figure 11: Weekly Pork Prices

Porkers Baconers

Sausages Average Pork prices

Mutton: Prices of mutton traded mixed;

prices of classes A2 and C2 declined; while

the prices of class B2 and C2 increased up

from a month ago. Prices are expected to

increase, following beef prices ahead of

festive holidays.

Pork: Domestic pork prices have declined in

September, compared to the previous

compared to a month earlier. Prices are

expected to even out due to ample supply

(seasonal cycle); while trading sideways in

the medium term.


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Table 8: Pork Prices Pork Price Band c/kg 25-Sep-2015 Month Ago 6 Months Ago Year Ago

Baconers 2138 2065 2369 2142

Porkers 2169 2219 2494 2311

Sausages 1565 1589 1711 1570

Average Pork Prices 1957 1958 2191 2008

Source: RMAA

Table 9: Poultry Prices

Source: Farmers Weekly

Poultry Price Band c/kg 18-Sep-2015 Month Ago 6 Month Ago Year Ago

Fresh 2198 2164 2288 2133

Frozen 2061 2017 2267 2043

IQF 1863 1826 1994 1670

1200

1400

1600

1800

2000

2200

2400

c/k

g

Figure 12: Weekly Poultry Prices

Frozen Fresh IQF (Individually Quick Frozen)

Poultry: Domestic poultry prices are trading

up compared a month ago. Prices are

forecast to increase in the short to medium

term on improved demand.


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FIBRE MARKET

Mohair: The average market indicator closed

declined to R182.55/kg in the third sale of the

2015 winter season, down by 0.6% from the

previous auction. The offering consisted 204

805kg, with 95.7% sold. The prices of young

goats and fine adults declined by 3%, while

those of kids increased by 1%. The price for

strong adults remained unchanged.

A weaker Rand exchange continues to give

support to the market. Prices are expected to

trade sideways in the short term; while

increasing the medium term.

Cotton: The International Cotton Advisory

Committee (ICAC) anticipates world cotton

consumption to surpass production in the

2015/26. World cotton stocks forecast at

20.4 million tons, are the lowest in over 6

seasons. Prices will gain some support from

supply issues; however demand remains

restraint. Which will cap any gains.

The 8th crop forecast for domestic cotton for

2014/15 season is forecast at 93 232 lint

bales, previously estimated at 96 770 lint

bales. This is up by 113% compared to the

previous season. Price forecasts in short to

medium term are bearish on sluggish

demand.

Figure 13: Cotton Prices

Source: Cotton SA

Figure 14: Mohair Indicator

Source: Mohair SA


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Wool: The domestic wool market indicator closed at R124.80/kg, up by 0.3% from the

previous sale. The offering consisted of 9 498, with 97.5% sold. A weaker Rand/dollar

exchange boosted the market prospects.

Standard Wool SA, Lempriere SA and G Modiano SA continued to dominate buying in the

market; while on the supply side offerings only came from BKB and CMW accounting for 86%

of offering. The next auction will be on 7th of October with an offering estimated at 6 905 bales.

Domestic prices are forecast to increase in the short term on improved demand.

Source: Wool SA


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Further enquiries: Malope MAHLANGU | [email protected] | 012 686 0967

Maine MOFOKENG | [email protected] | 012 686 0936

Distributor: Babalwa NKUMBESI | [email protected] | 012 686 0974

Sources:

AWI

Cape Wools SA

Citrus Growers Association

Cotton SA

Farmer’s Weekly

FNB

Grain SA

Independent Online

Landbou Weekblad

Mohair SA

Poultry Site

Red Meat Abattoir Association

South African Poultry Association

Wool SA

Other Insights by Land Bank:

AgriBusiness INSIGHT

AgriCommodity INSIGHT

AgriInput INSIGHT

Inflation INSIGHT

e-NSIGHT

MacroEconomic INSIGHT

Policy INSIGHT

For more information contact The Information Resource Centre (IRC) at [email protected] 0126860974.

Although every care is taken in the compilation of this publication to ensure the correctness, completeness, quality and reliability

thereof, the Land Bank does not accept any liability for any act, omission, loss, damage, the consequences thereof or any claim

whatsoever caused, whether directly or indirectly, by the reliance of any person on the information provided in this report. © 2015

Land Bank.

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agri-market insight agri -market insight sep-2015 · the second estimate for 2015/16 winter crop...

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