Reference Date: 25-July-2016
FOOD SECURITY SNAPSHOT
Maize production in 2016 declines steeply due to El Niño‑induced drought conditions
Imports of maize forecast at about 3.5 million tonnes in 2016/17, more than double previous year’s level
Maize prices remain at elevated levels mainly reflecting tight supply situation
Maize production in 2016 declines steeply for second consecutive year
With the harvest expected to conclude in July, the aggregate 2016 maize output (commercial and non‑commercial crop) is forecast at 7.6 million tonnes, 29 percent down from last year’s reduced harvest and a significant 39 percent below the previous five‑year average. The steep decline is mainly attributed to the El Niño‑related drought conditions that resulted in a 25 percent decrease in white maize yields compared to the five‑year average, while an overall reduction in the area planted also contributed to the smaller harvest.
Sorghum production in 2016, the other summer season cereal crop but produced on a much smaller scale, is forecast to contract by 26 percent on a yearly basis to 114 000 tonnes. While the winter wheat crop, to be harvested from October, is forecast at about 1.5 million tonnes, a similar level to 2015’s output. Overall, cereal production is forecast at 9.7 million tonnes, 34 percent (5 million tonnes) down on the average, mainly driven by the severe dry conditions.
Imports of maize forecast to more than double in 2016/17
As a result of the sharply lower production in 2016, imports of maize, mostly yellow varieties, are forecast at approximately 3.5 million tonnes for the 2016/17 marketing year (May/April). This is a substantial 1.5 million‑tonne increase compared to the previous year and a significant rise relative to the average. About 370 000 tonnes of maize have already been imported since May, more than double the level of the corresponding period in 2015.
Despite the sizeable import requirements, South Africa is still forecast to export approximately 0.85 million tonnes of mostly white maize, mainly bound for the drought‑affected neighbouring countries of Botswana, Lesotho, Namibia and Swaziland. As of July, 160 000 tonnes had been exported since the start of the current marketing year, the bulk of which was delivered to Botswana. This level is slightly higher than the quantity exported over the same period in the preceding year, mainly reflecting increased volumes exported to Zimbabwe.
Maize prices exhibit mixed trends, but remain at elevated levels
In recent months, maize grain prices exhibited mixed trends with yellow maize prices increasing for a second consecutive month in June, reducing the gap with declining white maize prices. Both prices still remained at elevated levels and as of June 2016, white and yellow maize prices were 66 percent and 46 percent above their year‑earlier values, respectively. These substantially higher year‑on‑year gains principally reflect the tight supply situation stemming from two consecutive below‑average outputs. The upturn in international quotations since April also added upward pressure. However, an appreciation of the Rand in June tempered larger price gains. Higher cereal prices are also contributing to driving up inflation, with the annual inflation rate in June estimated at 6.3 percent, compared to 4.7 percent in June 2015.