THE continuous growth in South Africa's wheat production could potentially result in reduced imports amid ongoing concerns about the conflict in Russia and Ukraine, according to the Market Intelligence Report June 2022.
The report published by the National Agricultural Marketing Council (NAMC) last week noted that the 2021 wheat production increased by 8% from the 2020 crop (2 120 000 tons) to reach 2 285 000 tons, breaking the 2-million-ton barrier.
“In addition, the Crop Estimates Committee (CEC) predicted that the wheat planting intentions for 2022 would be 538 350 ha, an increase of 2.84% from the crop planted in 2021. As plantings came to an end, the Western Cape province, a key wheat-producing province, received much needed rain to boost crop development after persistently dry weather.
“In other regions, prolonged rain delivered a severe blow to the summer crops and made harvesting a challenge. Due to this, early maize deliveries in 2022/23 (March–April) were only 414 048 tons, as opposed to 957 307 tons in 2021/22,” according to the report.
The council said that the carryover stock levels from the record 2021/22 of 2 126 448 tons boosted the 2022/23 stock levels despite the modest early deliveries.
It said that the persistent rainy conditions had reportedly caused sclerotinia (fungal disease), in some parts of the North West and Free State, which could be major concerns for sunflower seed. It said lower yields could arise from this threat.
The CEC projected that the sunflower seed crop in 2022 would total 961 300 tons, which was a 42% growth from last year's crop and would make it the second highest crop since the 1998/99 season.
NAMC said in the report that given a rise in global vegetable oil prices, which were further impacted by the conflict between Russia and Ukraine, the domestic sunflower oils have experienced a sharp rise in the first six months of this year.
It added that the Indonesian short-term ban on palm oil increased pressure on the already surging vegetable oil prices. Consequently, the council said that it was projected that South Africa would produce the second-largest harvest of sunflower seed, which was a positive development and likely to moderate sunflower oil prices in the second half of this year.
However, “the risk of sclerotinia disease due to excessive rains in the early part of 2022 could impact the positive sentiments in the markets,” the report said.
Globally, the latest data shows that the world's total oilseed production for 2022/2023 was set to reduce by 0.3 million tons to 646.8 million tons, due to lower sunflower seed production in the Ukraine and other parts of Europe and the US. Both the International Grains Council (IGC) and US Department of Agriculture projected that the sunflower would be down to 49.2 million tons in the current season.
However, the soybean and rape seeds were projected to increase. Global soybean production was projected to increase by 11% from 2021/22 to 390 million tons in 2022/23, according to the (IGC, June 2022). The main contributing countries were Brazil, Argentina and the USA.
The 2022/23 wheat season would start with some level of uncertainty on the international market. The consequences of the ongoing conflict between Russia and Ukraine continued to be a concern and caused uncertainties in the market.
On the maize market, the IGC's projection put the global maize production for 2022/23 at 1 190 billion tons, which was down from 1 219 billion tons recorded in 2021/22. The decline was attributed to weather challenges in the Southern African countries, except South Africa, as well as the South American countries.
BUSINESS REPORT