Reference Date: 03-October-2016
FOOD SECURITY SNAPSHOT
Drought-reduced 2016 harvest results in tighter maize supplies
Imports of maize forecast at over 3 million tonnes in 2016/17, more than double previous year’s level
Strengthening South Africa rand contributes to declining maize prices
Maize production in 2016 decreases steeply for second consecutive year
With harvesting of the main summer season cereal crops complete, the latest official estimate for aggregate maize production (commercial and non‑commercial crop) stands at approximately 7.7 million tonnes, down 27 percent from the previous year’s weather‑affected output. The steep decline is mainly attributed to the El Niño‑related drought conditions that resulted in a near 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 30 percent on a yearly basis to about 107 000 tonnes. By contrast, the 2016 winter wheat crop, which is about to be harvested, is forecast at just approximately 1.7 million tonnes, up 17 percent from the previous year, reflecting an expansion in plantings and improved yield prospects following beneficial weather.
Overall, cereal production is forecast at just under 9.9 million tonnes, 32 percent (almost 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 over 3 million tonnes for the 2016/17 marketing year (May/April). This is about 1 million tonnes above the volume imported in the previous year and a significant rise relative to the average. As of September about 1 million tonnes of maize had been imported since May, approximately one‑third of the estimated import requirement.
Despite the sizeable import requirement, 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, Swaziland and Zimbabwe. As of September, 300 000 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 continued to decline from record highs
In recent months, maize grain prices have been falling and by September prices of yellow and white maize were 19 and 21 percent down, respectively, from their record highs at the start of the year. With imports accounting for a greater share of the national supplies, the South Africa rand/United States dollar exchange rate is having a greater influence on price movements, and recent strengthening of the rand since May contributed to the falling price levels. In addition, recent upward revisions to the 2016 crop estimate and lower international quotations have put further downward pressure on prices. However, grain prices still remain higher on a yearly basis, reflecting the tighter supply situation this year.