Maize prospects for the 2018/2019 season
This article gives a brief overview of the 2018/2019 marketing season for maize. We firstly look at the international prospects and there we see an anticipated drop in production with utilisation slightly up.
On the local front we expect maize production to be lower than the record breaking crop of 2017/2018, with a decrease in production area. Yellow maize production continues to increase at the expense of white maize due to the high demand for animal feed.
World maize production in 2018 is due to fall by over 4% from last year’s volume; this is due to shrinking harvests in several countries in particular Argentina, Brazil and the US.
Utilisation is up sharply from the previous season and now raised even further on projected stronger increase in industrial use (starch and biofuels), mostly in China. On the trade front, there is an expected increase in imports by Asian countries. Ending stocks for 2019 have been revised down, this will be the lowest in five years, and this is mainly due to Ukraine and the US.
Looking back to the 2017/2018 marketing year maize production reached a record high of 16,769 million tons, planted on 2 628 600 hectares. The country has opening stock levels of 3,6 million tons as at 1 May 2018.
According to the National Crop Estimates Committee (CEC) for the 2018/2019 season, the size of the expected commercial maize crop will be 13,207 million tons; this is 22% less than the previous season. The area estimate for maize is 2,319 million hectares, which is 12% less than the previous season, while the expected yield is 5,70 t/ha.
The area estimate for white maize is 1,268 million hectares and for yellow maize 1,051 million hectares. The production forecast for white maize is 6,880 million tons, whilst the yield is 5,43 t/ha. In the case of yellow maize the production forecast is 6,327 million tons and the yield is 6,02 t/ha, yellow maize continues to increase significantly due to a rise in demand for animal feed.
The total demand for white maize and yellow maize, both domestic and exports is projected at 7,439 million tons and 5,864 million tons respectively. With total maize closing stocks levels projected at 3,381 million tons for 30 April 2018.
It is predicted that in the long term yellow maize production will continue to increase at the expense of white maize. White maize exports are also expected to slow down with South Africa facing competition from Zambia from importing countries in Southern Africa; Zambia faces favourable conditions in production and logistics.
Annual maize prices are projected to move further away from export parity levels but to remain well below import parity and will continue to be influenced by domestic supply and demand conditions.
Article submitted by Ikageng Maluleke, Junior Economist, Grain SA. For more information, send an email to Ikageng@grainsa.co.za.
Publication: November 2018