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The sheep meat market is currently bear, at a time where it normally follows a bullish momentum- South Africa

The average lamb class A price during October 2018 was under great pressure, and declined month on month to 73.37/kg. Prices have followed a declining trend since July 2018.

It is a norm for red meat prices to strengthen leading up to December as seasonal conditions are supportive of demand, however, prices are following a different trend this year.

A sluggish economy has constrained consumer spending, and Lamb and mutton remains the most expensive meat in the market, weighing on prices. These price decreases were reflected in the consumer price index, which measured that meat prices were 0.6% lower in September 2018 compared to during August of 2018.

Grains

White maize market performed better than yellow maize market this week.


South African maize prices were mixed, pressured by a stronger Rand. The market will be focusing on weather now, as the summer grain growing areas, is in planting season. Warm and dry weather conditions are forecasted for the central and the western growing regions in the following week. Weather forecasts seem negative, with minimal rainfall expected in the central and western summer rainfall regions until mid-November.


The stronger Rand supported cheaper wheat imports this week. Above average wheat yields are expected in some parts of the Western Cape, thanks to good rainfalls received during the winter rainfall period. The harvest process is underway and gaining momentum. Weather remains favourable for the harvest process, supporting deliveries.
Livestock

During September 2018, meat was 4.7% more expensive compared to during September 2017 as measured by the consumer price index that is published by Statistics South Africa. Meat prices are higher on average because of the aftermath of the 2015/16 drought which led to the liquidation of herds.


Shrinking production areas negatively impact sheep production. Sheep production is being weighed on by among other things, stock theft, predation, and the expansion of mining in the Mpumalanga region leading to shrinking production areas.
In terms of pork, the Listeriosis outbreak has passed and consumer confidence is still recovering. Prices have showed some good recovery over the past months. The pork industry has reached prices above the 2016 level after the listeriosis crisis, but prices are still below the 2017 levels. This market is expected to compete with beef, lamb and mutton for the share of a consumer’s rand.
Livestock prices may however recover in line with seasonal trends, as there is normally improved demand during this period and into the festive season.


Cheaper alternative proteins like pork and poultry are readily available and add a bearish tone to beef and sheep meat market. Consumers are under pressure and some may not be willing to pay more for beef, which may result in a switch to alternative products.
Vegetables

Tomato prices traded higher the week before but has since then lost gains. Higher tomato prices were supported by lower deliveries caused by the heatwave SA experienced about 6 weeks ago. Due to the intense heat, tomato plants couldn’t bloom and carry fruit. Nationally we’ve been seeing lower volume deliveries. Top quality fruit captured prices at the range of R18/kg a week ago while lower quality produce received prices around R6-8/kg. Prices are expected to remain high (not as high as R18/kg) for the next weeks, on the back off good quality tomatoes available. The national average consisting of both good and poor quality was around R10/kg which has now dropped this week to R7/kg.
Potato prices were higher week on week due to lower volumes delivered nationally.

The largest producing region Limpopo is currently the main region delivering. With sporadic deliveries from the Coast and the Sandveld. Prices are supported by very good quality products, which is sold quite easily due to sustained demand. Month-end spending is expected to support prices for the next weeks

Agricultural Economists, Absa group


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