The Xchange Platform Agricultural Market Viewpoint with Wandile Sihlobo

There is reason to be optimistic about SA’s 2024-25 maize production season

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I've been one of the people who have been vocal about the positive prospects for the 2024-25 agricultural season in South Africa, leaning of expected La Nina rains. I continue to remain optimistic about the upcoming season. But the reality is that we may have a late season. The good rains of the past few weeks have been scattered, and planting hasn't gained momentum in any meaningful way across the country.

This has raised fears in the grains markets about another tough season, partly contributing to the surge in maize prices we continue to see on SAFEX. Of course, the fundamental driver of maize prices is that we have tight supplies because of the bad crop in the 2023-24 season.

Still, I think it's too early to make a call as to whether the upcoming season will be tough. The prospect of La Nina is still active. In all likelihood, it may be a late season.

Until we see a material change in the weather prospects, we will maintain our view of a possible better season.

Another essential point to underscore is that even if we move from "La Nina" to "normal" weather conditions. Normal weather in the summer season does not translate to drought; it's normal rains.

We have gotten so used to the cycle of moving between "La Nina" and "El Nino" that we no longer talk of a regular season.

Still, I want to underscore that we are probably in for a late season. There are still convincing signs of La Nina. The planting has also not occurred in any meaningful way across South Africa.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

This podcast is produced by Richard Humphries, Sam Mkokeli, and Amanda Murimba
29 Oct 2024 English South Africa Investing · Food

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