Source: Prof Johan Willemse, SAPPO News May 2021, photo credit: Investopedia/Getty Images
Markets in a free market orientated world do not move in straight lines. It is cyclical and we tend to forget this fact!
During the last few weeks markets turned and maize and soybean prices decreased significantly, despite the fact that some analysts and local producers expected that prices will to continue to increase.
Similarly, there were a lot of analysts that predicted that the rand exchange rate would continue to weaken, bypassing the R20/Dollar. The upward cycle in maize and soybean prices (with some expecting further upward movement), peaked and we are experiencing a downward trend the past few weeks.
Similarly, the rand peaked, now trending stronger in a downward leg of the cycle. The lesson that I have learned in agricultural markets is that it is cyclical and it is very difficult to predict a specific price in future.
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The South African Pork Producers’ Organisation (SAPPO) coordinates industry interventions and collaboratively manages risks in the value chain to enable the sustainability and profitability of pork producers in South Africa.
