Better yields in 2017 has seen grain prices plummeting across the markets of the region, but it is not all bad news for farmers, according to Absa Bank’s regional update.
Soya Beans prices have plummeted and are now trading around $265 per ton. Some off takers are rumoured to be buying the crop at $230 per ton.
Maize prices have also been dropping. Maize is now trading around $137-152.3 per ton.
Wheat is trading around $410 per ton but farmers have not yet signed any off take agreements.
Zambia signed US$100 grain export deals with East Africa. Zambia is expected to export 382,640 tons of white maize, soya beans and other grains. The production of maize in 2016/17 for key food commodities in Zambia has been favourable with the country recording sufficient tradable surplus this year.
Zambia has recorded a surplus crop of 1.2 million tons, Malawi with 500,000 tons to spare and Zimbabwe is recovering well and is positioned to be self-reliant.
The Food reserve Agency (FRA) has set the maize floor price this week. The FRA intends to buy a 50 Kg bag of maize bag at K60.00 (R88.4562). This means that a ton of maize will cost 1,200 kwacha (R1769.12).
The Zambian National Farmers Union has shown dissatisfaction regarding the announced prices, indicating that the price will not be beneficial to the producers. The agency has indicated that with breakeven price for a 50kg bag of maize estimated at K75 (R110.570), the K60 (R88.4562) FRA market price leaves a farmer making a loss of K15 per 50kg bag.
The agency has further indicated that this price would not encourage producers to plant maize in the coming season.
Cereal production in Namibia is expected to recover from the lower crop during 2016, which was as a result of drought. The increased cereal production is expected from strong increases in maize, millet, as well as smaller predicted increases for the sorghum and wheat harvests.
The favourable cropping season was due to beneficial seasonal rains, despite a delayed start. Outbreaks of (Fall Army Worm) were also reported in several northern regions, mainly affecting the maize crop. However, the impact on production is reported to be minimal.
Livestock also benefited as grazing conditions improved following the better rains compared to the 2016 drought. The southern part of the country however was not as fortunate as the rest of the country and as a result producers do not have sufficient feed available for their livestock.
Namibian livestock prices have strengthened over the past months as the recovery in grazing conditions encourage retention of animals.
It is expected that that lamb prices will remain sideways due to seasonal demands and limited supply in South Africa. The A2 and C2 sheep price differences between the Namibia and the Northern Cape have been increasing.
The difference in the prices under normal circumstances would have increased live exports of sheep to South Africa, however due to the 1:1 sheep export condition, producers are still compelled to slaughter at the local export abattoirs, thus creating fairness in the market.
The weaner prices are still increasing due to the RSA demand.
Lamb and mutton prices have shown an upward trend in recent months. During the same time, maize prices continued to trend lower. High meat prices at the time of lower maize prices are positive to profitability of the industry.
As at July 2017, the national average lamb prices are currently trading at levels of R75/kg, which is the highest price on record. Prices have been following an upward trend since December 2016, and showed very strong gains at the end of May, and continue to remain at high levels.
Beef prices also experienced good increases in the six months to June 2017. The average class A beef price was up 17.2% at the end of June 2017 compared to the price paid at the end of January 2017. Weaner calf prices also continue to strengthen and reach high levels. The average weaner calf prices are trading between R34/kg to and R38/kg, with other areas reporting even higher prices due to good demand and less supply.
The herd rebuilding process is underway supporting increases in livestock prices. The excellent recovery of rainfall after the drought boosted the recovery of pastures.
Maize production during the 2016/17 production season is high. The 6th Crop Estimate Committee has pinned total maize production to reach a new level record of 15,969,300t up 2.16% from the previous 15.631,050t. South Africa is expected to export about 2 million tons of maize by April 2018.
The full exportable maize crop is estimated at 4.1 million tons. During the 1994/95 season, 4.7 million tons of maize was exported. Increased railway usage coupled with the capabilities of the East London and Durban port facilities will ensure efficient transportation of maize to export destinations.
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