As winter cereal planting gets under way, early indications are that SA is on track for moderate food-price inflation and strong agricultural exports.
The relief provided to consumers recently through falling food prices has been put at risk by the drought in the Western Cape, a weakening rand, rising fuel costs and the prospect of a global trade war. But analysts said consumers and farmers had reasons to be optimistic.
In March, SA recorded the lowest inflation rate since February 2011 at 3.8%, mostly due to lower prices of food, though this is expected to be at the bottom of the current cycle.
May is the start of the winter planting season, with indications that Western Cape farmers were betting on the forecasts of improved rainfall, said Wandile Sihlobo, an agricultural economist and head of agribusiness research at the Agricultural Business Chamber.
Early indications were that wheat planting would increase 2% in 2018, driven largely by increased planting in other provinces. Maize planting was expected to rise 5%, and canola 7%, said Sihlobo.
Maize production in 2018 was expected to be about 12.8-million tonnes. Although that was less than in 2017, SA still had significant overstocks from that year’s record harvest. The higher maize price had put pressure on Western Cape livestock producers who had to pay more for animal feed as trucks transporting maize from inland were returning empty from the coast.
Because of this, farmers in that province were likely to shift to feed crops such as canola and barley, at the expense of wheat, said Absa AgriBusiness economists. SA is a net importer of wheat, with a bumper crop expected globally, and expectations that the US would increase cattle slaughtering was reason to be optimistic about meat prices, said Sihlobo.
Local yellow maize prices have come off their yearly low, but remain subdued relative to previous years. On Friday the yellow maize contract price rose 1.1% to R2,199 a tonne, having climbed 13.7% in 2018.
Maize prices picked up slightly in March, when China slapped a 25% tariff on US maize and soybeans, a retaliatory measure after the US imposed new steel and aluminium tariffs.
The Minister of Energy, Mr. Jeff Radebe, announces the adjustment of fuel prices for May 2018 based on current local and international factors with effect from 02 May 2018.
Cape Town’s Atlantic Seaboard is now in a buyers’ market phase, according to Seeff’s agents in the area.
The latest Propstats data shows that the sectional title sector of the market is down year-on-year by about 34% in value, and 41% in volume terms up to April.
The latest FNB Property Barometer also points to a weak Cape market and this is reflected in the Propstats figures.
Where the market generated almost R1 billion in sectional title sales by early April last year, it has only managed just over R600 million this year, said Ian Slot, MD for Seeff Atlantic seaboard & City Bowl.
The price gap has almost doubled from 5.4% to 10.2% with recent sales concluded at anything between 10.7% and 28.6% below the asking prices.
It now takes almost twice as long to sell a property with the time on the market stretching from 6 weeks last year to over 11 weeks.
According to Adrian Mauerberger and Cecily Sher, luxury sectional title specialists at Seeff, stock has increased notably, but sellers are still not motivated enough to drop their prices sufficiently to encourage buyers to put pen to paper.
A quick glance at Private Property shows that there are well over 1,200 sectional title property listings on the Atlantic seaboard while only 88 sales were recorded on Propstats for this year to early April.
The demand in the luxury sector is mostly in the R5 million – R10 million range according to Mauerberger and Sher who noted further that it is mostly own-use buyers looking to scale down.
Semigration demand has dropped significantly while this market has never really attracted foreign and investment buyers, Seeff said.
Right now, it is only sellers who are motivated enough to drop their price and ensure that their property offers more than others currently available at a lower price that will sell, added the agents
FNB has released its House Price Index for March 2018, showing a slowdown in growth across the country.
The Department of Energy informs the public of the fuel price adjustments for February 2018. South Africa’s fuel prices are adjusted on a monthly basis, informed by international and local factors. International factors include the fact that South Africa imports both crude oil and finished products at a price set at the international level, including shipping costs.
The Rand appreciated, on average, against the US Dollar (from 13.23 to 12.20 Rand per USD) during the period under review. This led to a lower contribution to the Basic Fuels Price (i.e. the import parity price) on petrol, diesel and illuminating paraffin by 52.85c/l, 54.66c/l and 54.88c/l respectively.
The average Brent Crude oil price increased from 64.08USD to 69.11 USD per barrel during the period under review. The Crude Oil prices reached a three-year high of $70/bbl several times during January. The comments from OPEC Ministers, including Iran, that they would prefer prices nearer to $60/bbl in order to prevent US exports flooding their core markets, suggest that a change in emphasis may be coming and that prices may retreat in the near future.
The fuel prices schedule for the different zones will be published on Tuesday, 06 February 2018.
South African wheat production for the 2017/18 season is expected to decline by 23percent as compared to the previous season, mainly due to poor yields in the Western Cape and in some parts of the Free State province.
A new report has revealed what you’ve always suspected: property prices in Cape Town and Johannesburg are getting more expensive.
Fuel prices may result in welcome news in February after the exchange rate has continued over the past two weeks to trade at the substantially stronger levels since the end of December, despite the sharp rise in the Brent crude oil price, which is the international benchmark for oil prices, says independent economist Fanie Brink.