Agriculture
Global grains and oilseeds production conditions for 2022/23─── 05:00 Tue, 01 Nov 2022
As usual on the Agri Hour, Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa, Agbiz, provides a weekly insert about the latest on the global as well as South African agricultural markets.
He also provides more information about the latest developments in the agricultural sector.
See PODCAST below
This week, Sihlobo takes a look at the global agricultural conditions for the 2022/23 season. He mainly focuses on grains and oilseeds.
“As the 2022/23 summer crop season commences in the Southern Hemisphere, the grains and oilseeds production estimates released by the International Grains Council (IGC) and the United States Department of Agriculture (USDA) will increasingly incorporate more information on underlying developments at farms.
“The IGC maintained a broadly optimistic view of the 2022/23 global grains and oilseeds production, estimated at 2,26 billion tonnes. This harvest is only 1% lower than the 2021/22 season but still the second-largest crop on record. Notably, production conditions differ amongst various crops.
“For example, the 2022/23 global maize production is estimated at 1,17 billion tonnes, down by 4% year-on-year. This decline is on the back of an expected smaller crop in the US, Ukraine, EU and India. The US and the EU experienced drought and heatwaves during the summer, damaging crops in some regions,” explains Sihlobo.
He further says that India received heavy rains these past few months, leading to poor yields in some regions. Ukraine is still at war with Russia, which has reduced activity in the fields.
“The decline in these countries overshadows the relatively good crop in China, Brazil, Russia, Argentina and South Africa. The IGC forecasts South Africa’s 2022/23 maize harvest at 15,7 million tonnes, which is unchanged from their previous season’s estimate.
“Overall, the 2022/23 global grain and oilseed season presents an encouraging picture of supplies. Still, the price moves of the commodities will likely differ in the coming months because of the variations in the production levels compared with the 2021/22 season.
“The current forecasts will probably be sufficient to provide relief from the levels the prices were at in the weeks after the start of the Russia-Ukraine war. With that said, the current production levels also mean that global grains and oilseeds prices are unlikely to return to the pre-Covid and pre-war levels soon,” concludes Sihlobo.
