Reference Date: 23-March-2016
FOOD SECURITY SNAPSHOT
Maize production in 2016 forecast to fall steeply from previous year’s below‑average output, on account of El Niño‑related drought conditions
Tight maize supplies instigated increased imports of maize in 2015/16, with further rises expected in 2016/17
Maize prices declined from record highs, but remain at elevated levels
Maize production forecast to decline steeply in 2016 for second consecutive year
Harvesting of the 2016 summer cereal crops is expected to commence in April and current prospects indicate a sharp production decline with the maize output forecast at 7.7 million tonnes (commercial and non‑commercial crop), 28 percent down from the below‑average 2015 harvest. Despite some improved rains in 2016, record high temperatures and overall severely suppressed seasonal rainfall between October 2015 and February 2016, attributed to the prevailing but weakening El Niño episode, are behind the acutely unfavourable production outlook. Across most of the large cereal‑producing provinces, vegetation conditions are severely stressed, confirming expectations of reduced yields, which are anticipated to fall by up to 25 percent, while a reduction in the area harvested is also forecast.
Outputs of the other 2016 summer crops are also expected to decline, except sunflower seeds, which are forecast to increase, on account of an expansion in plantings.
Large maize imports in 2015/16
Exports of yellow maize have declined significantly in the 2015/16 marketing year (May/April), reflecting tight supplies following the reduced 2015 harvest. With approximately one month of the current marketing year remaining, yellow maize exports are forecast to reach about 200 000 tonnes, compared to 1.4 million tonnes registered in the previous year. The bulk of the decrease reflects reduced deliveries to Asia. Exports of white maize, the main food staple in Southern Africa, are anticipated to reach 430 000 tonnes, with Botswana and Namibia the main recipients. At this projected level, the volume of white maize exports is about 100 000 tonnes down on the previous year, with the record high prices partly attributed to the lower quantities in 2015/16.
To boost domestic supplies, given an expected second consecutive below‑average harvest this year, maize imports (mostly yellow) in 2015/16 are forecast at 1.45 million tonnes, substantially above the negligible volumes of last year. In 2016/17, imports are forecast to rise further, to between 3.5 and 4 million tonnes. However, global export availabilities of white maize are comparatively limited as it is only produced in significant volumes in Mexico and the United States of America, and this might result in the need to substitute foods.
Maize prices declined at start of 2016, but remain at elevated levels
Both yellow and white maize prices declined in February and the beginning of March, partially reversing the strong gains of the preceding months. Sharper decreases were recorded for yellow maize prices, increasing the spread between the two commodities, with white maize prices about ZAR 1 500 per tonne higher at the start of March. The price differential was primarily driven by the substantial imports of yellow maize, mostly from South America, that boosted supplies and exerted downward pressure. While for white maize, expectations of a steeper production fall in 2016 and relatively limited availabilities on the international market sustained upward pressure and limited the declines. The slight strengthening of the South African Rand in February also contributed the recent price falls.
The drought‑induced inflationary pressure resulted in a rise in the national consumer price index, which surpassed the inflation target range set by the South African Reserve Bank, in January 2016.