Jan. 25 (Bloomberg) -- South African farmers may produce the nation’s smallest winter-wheat harvest in 19 years after low prices at the start of the season led to a reduction in planting and as floods and heavy rain damage crops.
Farmers may reap 1.51 million metric tons of the grain this season, 3.8 percent less than earlier forecast, according to the government’s Crop Estimates Committee. That would be the least since 1992, when 1.32 million tons was produced, spokeswoman Marda Scheepers said by phone from Pretoria today.
This season, South African farmers planted the smallest acreage of wheat since the “early seventies or even before that,” according to Piet Faure, a trader at CJS Securities Inc. in Johannesburg. “Prices were low last year, which is why the acreage was low this year, though yields per acre have risen on better fertilizer use,” he said by phone from the city today.
South Africa is the continent’s fourth-largest wheat producer after Morocco, Egypt and Algeria. Prices for the grain on the South African Futures Exchange have climbed 40 percent during the last 12 months, and were 1.1 percent lower at 3,107 rand ($439) per metric tons at the midday close today.
“I don’t think the size of the South African crop will affect prices as much as the world price of wheat,” Faure said. “We will likely have to import about 1.4 million tons of wheat, which in itself is another record.”
Wheat fell for the first day in six in Chicago today on speculation that a rally to a five-month high will reduce demand from investors. Wheat for March delivery slid 12.75 cents, or 1.5 percent, to $8.225 a bushel at 1:14 p.m. London time on the Chicago Board of Trade, having yesterday climbed to the highest price since Aug. 6.
Earlier, the South African Crop Estimates Committee cut its winter wheat production forecast because of lower output from the Western Cape, Free State and Northern Cape provinces, where crops have been damaged and destroyed by floods.
That committee’s forecast of 1.51 million tons missed the median estimate of eight traders surveyed by Bloomberg News, who had expected the forecast to be reduced by 1.4 percent to 1.55 million tons. Forecasts in the survey ranged from 1.4 million tons to 1.57 million tons.
The Committee also reduced its malting barley forecast by 6.4 percent to 200,035 tons and its canola estimate by 0.9 percent to 37,620 tons.
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