Directorate: Statistics & Economic Analysis
Sub-directorate: Economic Analysis
Despite South Africa's bleak macro-economic outlook and political instabil- ity; consumers can expect lower food prices, caused by record breaking maize harvest estimated for this year. Local white maize, yellow maize, wheat and soybean prices decreased by 2.0%, 2.0%, 2.6% and 0.9%
respectively this week meanwhile sunflower increased marginally by 0.04%
and also sorghum increased by 3.5%. Internationally, in the US maize mar- ket the unfavourable weather is still a key focus, as the pollination stage approaches which requires moisture, nevertheless the USDA remains opti- mistic about the total harvest. During the reporting week, in the US all ma- jor grain prices declined; yellow maize, wheat and soybean prices went down by 1.0, 3.7% and 0.03% respectively.
The rand received a welcome boost on the 27/07/2017 after dovish com- ments by US Federal Reserve chairperson Janet Yellen, which placed the dollar on the back foot; the Rand strengthened by 0.1% against the US dollar week-on-week, while depreciated by 1.1% and marginal 0.03% respectively against Euro and Pound.
Brent crude oil averaged $50.69 in the reporting week, 1.0% less than $50.17 reported last week. US crude stockpiles shrank to the lowest level since the start of the year, easing a global glut. Kuwait agreed to trim sales volumes of oil for 2017, joining the U.A.E. in promising to pump less after Saudi Arabia called on OPEC producers to cut more.
Spot price trends of major grains commodities
1 year ago Last week This week
w-o-w % change
Week 30 Week 29 Week 30
(25-07-16 to 29-07-16) (17-07-17 to 21-07-17) (24–07-17 to 28-07-17)
RSA White Maize per ton R 4 395.20 R 1 827.40 R 1 790.00 -2.0%
RSA Yellow Maize per ton R 3 270.80 R 1 942.60 R 1 903.00 -2.0%
USA Yellow Maize per ton $135.62 $148.86 $147.41 -1.0%
RSA Wheat per ton R 4 510.00 R 4 608.00 R 4 489.00 -2.6%
USA Wheat per ton $154.51 $184.67 $177.76 -3.7%
RSA Soybeans per ton R 7 017.20 R 4 765.60 R 4 723.00 -0.9%
USA Soybeans per ton $386.10 $365.40 $365.30 -0.03%
RSA Sunflower seed per ton R 5 833.80 R 4 680.00 R 4 682.00 0.04%
RSA Sorghum per ton R 3 200.00 R 3 063.60 R 3 170.00 3.5%
Crude oil per barrel $ 45.22 $50.17 $50.69 1.0%
National South African Price information (RMAA) : Beef
National South African Price information (RMAA) : Lamb
National South African Price information (RMAA) : Pork
In the reporting week Class C prices continued to strengthen due to reduced supplies. Weekly average selling prices for class A2 and A3 beef decreased by 0.5% and 0.3% respectively mean while C2 increased by 0.6% in the reporting week. Supply remains tight in the market this could be due to the limited avail- ability of grazing during winter season but the herd rebuilding continues. The weekly average purchase prices for class A2 and A3 beef both decreased by 0.3%, while class C2 beef purchase price went up by 0.4% end of week. Unit sales for class A3 and C2 beef decreased by 14.9% and 2.5% respectively in the reporting week while class A2 beef unit sales increased by 7.9% end of week.
The weekly average purchase price for class HP, HO and BP pork decreased by 0.2%, 0,2% and 1.2% respectively in the reporting week with tight supply and steady demand. Unit sales for class BP and HO pork decreased by 4.6% and 5.8% respectively while class HP increased by 3.7% end of the reporting week. In the medium term it is expected that local markets will trend sideways as seasonal demand conditions remain relatively subdued.
Lamb and mutton prices were strong in the reporting week; weekly average selling prices for class A2, A3 and C2 lamb increased by 9.9%, 12.6% and 4.2%
respectively end of week on renewed demand and limited supplies across markets. The weekly average purchase price for class A2, A3 and C2 lamb in- creased by 1.5%, 2.7% and 10.3% week-on-week. Higher producer prices and the deterioration in grazing camps during winter season may support in- creased slaughter and therefore weigh down on prices. Unit sales for class A2 and A3 lamb increased by 8.0% and 52.6% respectively end of week , mean while C2 decreased by 2.9%.
Week 28 (10/07/2017 to
16/07/2017) Units Avg Purchase Price Avg Selling Price
Week 29 (17/07/2017 to
23/07/2017) Units Avg Purchase Price Avg Selling Price Beef
Class A2 8091 46.04 46.49 Class A2 8733hh 45.90 46.27
Class A3 1027 46.53 46.62 Class A3 874 46.40 46.49
Class C2 1648 40.85 39.99 Class C2 1607 41.02 40.23
Week 28 (10/07/2017 to
16/07/2017) Units Avg Purchase Price Avg Selling Price
Week 29 (17/07/2017 to
23/07/2017) Units Avg Purchase Price Avg Selling Price Lamb
Class A2 9 053 75.52 71.50 Class A2 10 374 76.57 76.73
Class A3 1 169 75.37 68.84 Class A3 1 971 77.71 77.74
Class C2 1 120 53.57 55.00 Class C2 923 57.66 61.05
Week 29 (17/07/2017 to
23/07/2017 Units Avg Purchase Price
Week 29 (17/07/2017 to
23/07/2017) Units Avg Purchase Price
Pork
Class BP 6768 26.30 Class BP 6 458 26.26
Class HO 5397 25.50 Class HO 5 082 25.44
Class HP 4348 25.67 Class HP 4 507 25.36
Latest News Developments
South African farmers have managed to produce about 10.6million tons of maize during the first eleven weeks of harvesting, only 5.3million tons is required to meet the 15.63million tons projected by the Crop Estimate Committee. According to Agbiz, farmers continued to deliver large volumes of maize to com- mercial silos across the country, with 1.09million tons delivered by the end of the week 14 July 2017. Also on the export front the country has done well, even though other countries in the region like Zambia, Malawi, Botswana and Zimbabwe also reported a bumper harvest season. The annual maize con- sumption in South Africa is estimated to be around 10.5million tons, 5 million tons can be used for exports. South Africa’s record harvest were supported by the forecasted year-on- year production gain, which showed a 35% increase in plantings, higher prices and anticipated bumper yields, and mostly the favour- able weather conditions earlier this year. The department of energy announced that both grades of petrol will increase by 19 cent a litre from 02 August 2017; the increase is as a result of the weakening of the rand against the dollar as well as higher crude oil prices; “The rand depreciation slightly, on average against the US dollar during the period under review. The prices of petroleum products increased, on average, in the international markets in line with the higher crude oil prices. The Crude oil prices rose, partly on drawdowns of global inventories including in the closely watched US market”. On the other hand Statistics South Africa announced that producer price index (PPI) decreased slightly to 4.0% year-on-year in June 2017 compared to 4.8% in May; with the main contributors to the PPI drop being food beverages and tobacco products(1.6% points) coke, petroleum, chemical, rubber and plastic products (0.8 of a percentage point) and wood and paper products (0.6 of a percentage point); whilst Agriculture, forestry and fisheries annual percentage change in the PPI was negative 1.4% in June 2017 (compared with a negative 0.5% in May 2017). The main contributor to the annual rate of a negative 1.4% was agriculture (with negative 2.5 percentage points). In the US, the Energy Information Administration report anticipate a drop in crude, gasoline and distillate. In the re- porting week the dollar weakened as the market awaits the start of the Federal Open Market Committee meeting. Oil has remained below $50 a barrel amid worries that rising global output will offset curbs by members of the Organisation of Petroleum Exporting Countries and its allies.
