At the end of September, SA closed its 2023/24 marketing year for wheat. We had a decent harvest of 2.05-million tonnes during the season, just above the five-year average harvest of
1.98-million tonnes.
SA achieved this despite a challenging production season. For example, the Western Cape, which produces nearly two-thirds of SA’s wheat crop, suffered heavy floods in September 2023, which at the time raised fears of potential significant crop losses. But the wheat fields recovered towards the end of the year and subsequently delivered a decent crop.
Still, because of a mild uptick in consumption, imports were not reduced. On the contrary, imports increased 15% from the previous season to 1.93-million tonnes. By the end of September imported wheat had helped stabilise wheat stocks and even boosted the opening stocks for the new season. At the start of the 2024/25 wheat season, the opening stock was 753,000 tonnes, up 34% from the previous season. These relatively large opening stocks will boost the 2024/25 supply.
While the 2024/2025 winter crop season started on a better footing than the previous one for the Western Cape, it will probably yield a slightly lower harvest. The Crop Estimates Committee (CEC) forecasts SA’s wheat crop for the 2024/25 season to be 1.96-million tonnes, down 4% from the previous season. The crop losses are not expected in the Western Cape, the country’s major wheat producer, which in fact expects a larger harvest this season.
The challenge is the poor harvest in other producing provinces, primarily the Northern Cape, Limpopo and Free State. These provinces have reduced area plantings for wheat this year. The relatively lower wheat prices at the start of the season may be one of the factors behind the decision to slash plantings.
However, the challenge for the Free State and Limpopo amounts to more than just the price. These provinces experienced severe midsummer drought, which led to significant summer grain losses. When the winter wheat season started in May, the mood of farmers was downbeat and they worried about soil moisture. Thus, we saw lower plantings and relatively lower expected yields in some areas. These challenges have contributed to the 4% expected national decline in the 2024/25 winter wheat harvest.
In a season like this with an expected lower harvest, one would assume that imports would increase, especially as the consumption of wheat and wheat products in SA remains strong. However, the latest Grain & Oilseeds Supply & Demand Estimates Committee estimates suggest that 2024/25 wheat imports may fall 7% to 1.8-million tonnes. This would be closely aligned with the five-year average of wheat imports to SA.
The main reason is the higher opening stocks, supplemented by the ample imports in the past season. It seems that importers took advantage of relatively low global wheat import prices in the past few months to build supplies for the new season.
We are still relatively early in the 2024/25 production season. However, the crop conditions look favourable in most regions of the country. We are thus optimistic that the forecast harvest will materialise. If anything, we could even see slight upticks in the expected harvest. At the end of October, the CEC had slightly lifted the 2024/25 wheat production forecast by 1% from the previous estimate to 1.96-million tonnes.
The 2024/25 season imports are likely to account for 47% of SA’s annual wheat consumption. The sourcing of imports should not be a challenge. There are sizeable global wheat supplies. The International Grains Council forecasts 2024/25 global wheat production at 798-million tonnes, the second largest on record.
• Sihlobo is chief economist at the Agricultural Business Chamber of SA and an extraordinary senior lecturer in Stellenbosch University’s department of agricultural economics.
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