Johannesburg - South African soybeans rose to highest on record after the nation’s Crop Estimates Committee said this year’s harvest will be 32 percent smaller than 2015’s record crop amid a global shortage of the oilseed.
Soybeans for July delivery rose 0.5 percent to R7 520 ($484) a metric ton on the South African Futures Exchange in Johannesburg, the highest since at least April 2002, when Bloomberg started compiling the data. Futures have rallied 62 percent over the past year.
While the committee raised its forecast for soybean production by 4.9 percent on Thursday to 728 650 tons, that’s still a third less than amount reaped last year. Futures rallied to the strongest since July 2014 in Chicago on Thursday after Oil World said smaller soybean crops in Brazil and Argentina will widen a global shortage of oilseeds forecast for this season.
South Africa’s rand has lost 23 percent against the dollar in the past 12 months, raising the cost of imports and increasing demand for local produce.
“The lower expected crop is underpinning the market, but also some external factors like the weaker rand and high Chicago soybean prices are all factored in," Wandile Sihlobo, head economist at South Africa’s Agricultural Business Chamber, an industry group, said by phone.
Read also: Wheat futures hit record high
The worst drought in more than a century, induced by an El Nino weather phenomenon, has boosted South African food costs.
BLOOMBERG