Seasonal outlook is promising for agricultural commodities
DURBAN - The medium-term seasonal outlook produced by the SA Weather Service remains benign for KwaZulu-Natal (KZN) farmers, with decent rains expected, while recent rains have filled up some dams, so that the average is higher than last year.
This was also reflected in the October rainfall data that showed that Richards Bay in KZN had the highest rainfall of all weather stations with 177mm, while the University of Zululand was not far behind with 159mm.
The rain was patchy, so Paddock, for instance, only had 45mm in October compared with 270mm in October 2017 and a long-term average of 134mm for October.
First National Bank agricultural economist Paul Makube said the outlook for the season ahead was moderate to favourable for most agricultural commodities, with early season rains beneficial for cultivated crops and pastures.
“This bodes well for crops such as potatoes, soya beans, maize and sugar, including pastures that are critical for beef and dairy despite concerns of the developing El Niño weather pattern. The KZN dam levels are currently at 58.6 percent relative to 46.3 percent this time last year, and should improve as the season progresses,” he said. He cautioned that some dryness late in the rainfall season was likely to impact negatively on the sugar crop.
“Nonetheless, some relief for producers is the recent nice uptick in the sugar Recoverable Value price from R3 817 to R4 019 per ton in September 2018 after reaching the bottom of the trough during August (R3 530). Additionally, the ITAC agreed to a dollar based reference price of $680 (R9 637) per ton of sugar ($856 applied for), which is up from $566 per ton, which together with the possible reduction in demand due to the Health Promotion Levy will help curb imports in the medium term.”
Makube said the weather would be critical as South Africa headed into mid-summer and a deterioration in production conditions might dampen this outlook.
The 7.2 percent year-on-year (y/y) increase in tractor sales to 612 units in September showed that KZN farmers remained upbeat about prospects given the recent good rains and were not too concerned about the land tenure question.
On a year-to-date basis, tractor sales for the first nine months were 6.7 percent higher than the same period last year, so the June 18.8 percent y/y jump was not a flash in a pan.