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Country Briefs

  South Africa

Reference Date: 04-April-2017

FOOD SECURITY SNAPSHOT

  1. Production in 2017 forecast to rebound strongly to near-record high

  2. Imports of maize up on a yearly basis in 2016/17, but country is expected to return to being net-exporter in 2017/18 marketing year

  3. Maize prices fall sharply, on the back of expected bumper crop that will ease supply pressure

Maize production forecast to reach near-record high in 2017

Harvesting of the 2017 maize crop will commence in late April in eastern areas and progressively move west until June. Current prospects indicate a strong production rebound, with the aggregate output in 2017 forecast at 14.5 million tonnes, about 75 percent above the drought-reduced 2016 level. This would put the 2017 harvest at the second highest level on record. The forecasted year-on-year production gain reflects a 30 percent increase in plantings spurred by higher prices and expectations of bumper yields, owing to wetter conditions this season. Disaggregated, white maize accounts for the bulk of the expected increase, forecast to nearly double from the reduced output of 2016.

Sorghum production is also forecast to rise and a bumper soybean crop is projected.

Maize imports up on a yearly basis, reflecting reduced 2016 output

Maize imports in the 2016/17 marketing year (April/May) are estimated at around 2.4 million tonnes, approximately 0.4 million tonnes up on an annual basis. The increase is on account of the drought-reduced 2016 maize harvest that cut domestic supplies, while a draw-down in stocks helped to bridge the supply gap. As of March 2017, about 2.3 million tonnes of maize had been imported, mainly yellow maize from Argentina. White maize imports are currently estimated at 0.68 million tonnes, mostly originated from Mexico.

As of March, about 0.73 million tonnes of maize were exported, mostly yellow maize, with the bulk of this quantity shipped to Botswana and Zimbabwe.

In the next 2017/18 marketing year (April/May) reflecting the expected bumper output, South Africa is expected to return to being a net-exporter, with minimal import levels forecast and exports are expected to rise significantly to around 2 million tonnes.

Prices of maize continued to decline steeply

Maize prices continued to decline in 2017, mostly owing to the expectations of a significantly improved supply situation following the tight conditions in 2016. White maize prices decreased at a steeper rate compared to yellow varieties and in March 2017 were 54 percent below their year earlier levels. At this level, the white maize spot price was below the export parity level. This is in contrast to much of 2016 when prices were above import parity, indicating that it was less costly to import than to purchase domestic supplies. In addition, white maize prices fell below yellow maize prices for the first time in over two years.