Reference Date: 27-February-2015
FOOD SECURITY SNAPSHOT
Preliminary production forecasts point sharp reduction in 2015 maize crop, due to dry weather
Following favourable supply situation in 2014/15 (May/April), lower production forecast for 2015 is expected to result in tighter supply situation and low export availabilities
Maize prices increased rapidly in last month in response to unfavourable production prospects. However, overall good supply situation in 2014/15 has maintained prices below their year-earlier levels
Sharp decrease forecast for 2015 maize production
Harvesting of the 2015 summer cereal crops will begin in April and is expected to be completed in June/July. Maize crop conditions deteriorated significantly in February in parts of the large producing provinces of Free State and Northwest, which contribute nearly two-thirds to the national output, following a cessation of rains. Moisture deficits during this period have critical impact on maize yields and early forecasts point to a 35 percent decrease in yields in 2015 for white maize (commercial sector) from the above-average level of the previous year. Although a resumption of rains in late February helped improve conditions, preliminary forecasts (including the non-commercial sector) point to an aggregate 2015 maize crop of around 10 million tonnes. However, if favourable weather conditions continue in the remaining two to three months of the cropping season, some upward revision of production estimates may follow.
Bumper maize crop estimated in 2014
Aggregate (commercial and non-commercial) maize production in 2014 was estimated at 14.9 million tonnes, about 20 percent above both the previous year’s reduced level and the five-year average. The increase is largely attributed to higher 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 was estimated for yellow maize. Sorghum production is estimated to be up by a substantial 74 percent to 255 700 tonnes, following a rise in yields and a larger planted area.
The final estimate for the winter wheat crop, harvested at the end of 2014, stands 1.79 million tonnes, only 4 percent below last year’s average harvest. The drop is largely on account of a 6 percent decrease in plantings, in response to lower prices and poor soil moisture at planting time (May and June 2014). The lower plantings were, however, partly offset by higher yields.
Reduced maize exports forecast for forthcoming 2015/16 marketing year
Based on the latest 2015 production forecast and consequent expectation of a tighter supply situation, exports are forecast to decrease significantly in the 2015/16 marketing year (May/April). As a result, importing countries in the subregion, which normally import large quantities of South African grain, may need to source their supplies from other countries both within and outside the subregion. The availabilities of alternative export supplies in Southern Africa will largely depend on the outturn in Zambia, which has become a distant second exporter. South Africa may also need to import maize to stabilize national supplies.
In the current 2014/15 marketing year, approximately 1.8 million tonnes of maize have been exported between May 2014 and the start of February 2015, a similar quantity compared to the corresponding period in the previous marketing year. About 75 percent of this volume is accounted for by yellow maize, mostly shipped to Asia. The total volume of white maize exports, mainly to countries in the subregion, is below its levels of last year, reflecting larger national 2014 harvests in Southern Africa and consequently reduced import needs, particularly in Zimbabwe.
Sharp monthly price increases reflect unfavourable production prospects
Spot prices of white maize increased rapidly in the first two weeks of February, in response to the deteriorating production prospects for the 2015 crop. The current monthly average for February stands at ZAR 2 545 per tonne, about 26 percent higher than January; however, prices still remain 20 percent below their year-earlier values reflecting the overall favourable supply situation in 2014/15 following the bumper 2015 harvest. Similarly, yellow maize prices increased by about 14 percent on a monthly basis in February, as crop conditions remained comparatively more favourable than those of white maize.