Reference Date: 05-August-2014
FOOD SECURITY SNAPSHOT
A bumper maize crop estimated at about 14.7 million tonnes, was gathered in 2014
Positive supply outlook for the 2014/15 marketing year (May/April)
The improved supply situation, as well as lower international quotations, resulted in a sharp decrease in maize prices
Well above-average maize output in 2014
South Africa’s aggregate (commercial and non-commercial) maize production in 2014 is estimated at 14.7 million tonnes, about 18 percent above the previous year’s output. The increase is mainly attributed to increased yields, particularly for white maize, following the drought-affected harvest in 2013. White maize from the commercial sector increased by 37 percent, while only a small increase is seen for yellow maize. Sorghum production is expected to register a large annual increase of about 74 percent to 255 700 tonnes, following a rise in yields and a larger planted area.
The winter wheat crop, to be harvested from October, is forecast to decrease this year. Lower prices and poor soil moisture in May and June, contributed to a contraction in plantings to 484 000 hectares, about 4 percent below 2013’s level. Assuming near-average yields, an output in the proximity of 1.7 million tonnes, compared to 1.9 million tonnes in 2013, is foreseen.
Increased maize supply expected to replenish stocks in 2014/15
The increased availability of maize in the 2014/15 marketing year (May/April) contrasts to the tight conditions experienced last year. The large harvest would enable stock replenishment, forecast to more than double this year compared to the low level (less than 1 million tonnes) of 2013/14.
Maize exports in 2014/15 are forecast at a comparable level to the 2.1 million tonnes exported in the previous year. Already, between May and July, about 721 000 tonnes have been exported, mainly yellow maize to Asia. However, given the production recoveries in several countries in Southern Africa in 2014, as well as the availability of maize supplies in Zambia, exports to neighbouring countries are expected to decline moderately.
Sharp price declines reflect improved supply outlook
Reflecting the positive supply outlook, prices of maize declined sharply since March, but month-on-month decreases slowed in July. At ZAR 1 708 (white) and ZAR 1 792 (yellow) per tonne, prices are 25 and 17 percent below their year-earlier values and are trending close to their export-parity levels. In addition, the favourable global maize production outlook and the consequent lower international prices have also put downward pressure on South Africa’s grain prices.