A severe drought may force South African wheat farmers to plant less this season, though some traders believe recent rains in the Western Cape could be enough to salvage the harvest. Many farmers may even opt to plant maize after a surge in prices for the staple grain could encourage many wheat farmers to switch to the staple grain, industry players said.
South African farmers have since late 2006 suffered one of the driest spells in years, taking a heavy toll on maize output for the 2006/07 crop about to be harvested.
As wheat planting kicks off for 2007, traders feel the country's second biggest crop could suffer a similar fate after the dry weather that gripped the interior provinces. The Western Cape province, which is in its traditional rainy season and produced the bulk of the previous 2.11 million tonnes, is viewed as the only bright spot.
"It's a weather game, really. Your subsoil moisture is a big deal, so from that point of view you really need decent rain. In the north western Free State, if they wanted to plant wheat, they would struggle," a trader in Johannesburg said. Like others, however, he said it was too soon to speculate on the outcome and offered no estimate.
He said wheat folk might delay planting until September to monitor the maize market, which has levelled off after a phenomenal rally. Provided prices stay attractive, some may switch to maize, which is planted in the latter part of the year. Most-traded July white maize futures topped 2,000 rand a tonne in March.
The same contract closed at 1,630.2 rand on Wednesday. Wheat futures for the same month fetched 2,200 rand. "There'll be a slight increase in the Western Cape.
The Free State province will be almost 20 percent down to 220,000 hectares," another trader said. "The guys still have quite a bit of time to plant (until June). The question is rain. Soil moisture is already poor. But even if it was better, if farmers haven't had rain recently they will struggle.
In the North West, the chances of planting there are almost nothing." But others said good rains in the wheat heartland should bode well for 2007. "I think there's very little excuse not to plant in the Western Cape," he said, although he noted possible reduced plantings in the Eastern Cape.
A senior official at an agricultural firm echoed his view, but said the central part of the grain triangle would be hard-pressed to cultivate land. "The problem is big in the dry land areas. We didn't receive any rain for a long time. There's not sufficient moisture around, in the Free State especially," the official told Reuters.
"The second thing is price differential between maize and wheat. The irrigation guys have said they would rather wait for maize plantings instead of wheat. I'm convinced we will not see 40 percent of last year's plantings in dry land areas."
Comments
Comments are closed.