Food security is a topical issue in many African countries, where maize is, by and large, the staple food. Kenya remains a net importer of maize following a harsh drought in the 2016-17 production season. The thin resources available in Malawi, Zambia and Zimbabwe remain stretched as drought and fall armyworms threaten the production season.

SA started the 2017-18 season on a bad footing. As I have highlighted in this column before, the difficulties were brought about by extreme dryness in the western sections of the Free State and the North West at the beginning of 2018.

Fortunately, summer crop conditions have improved, albeit marginally, thanks to recent rainfall. In the week ending February 6, World Weather released its assessment on SA’s soil moisture, with the data showing that recent rainfall in the summer crop producing regions helped improve soil moisture, which bodes well for summer grains and oilseeds.

Moreover, in its recent seasonal climate watch, the South African Weather Service indicated that the summer crop growing areas could experience a weak La Niña between February and April 2018. This means there are prospects of above-average rainfall from now into early autumn. This could support crops in areas that managed to plant on time, from the current stages of development up to pollination, raising the chance of fairly good yields in grains and oilseeds.

While SA’s summer grain and oilseed production is expected to decline this season, some international observers are fairly positive about the country’s crop performance.

For major grains such as maize, the US agriculture department recently left its maize production estimate unchanged from January at 12.5-million tonnes (down from 17.5-million tonnes in the 2016-17 season). This includes both commercial and non-commercial maize production.

The Agricultural Business Chamber sees SA’s 2017-18 commercial maize production at 11.2-million tonnes. The estimates from the National Crop Estimates Committee will be released on February 27.

Also worth noting is that a harvest of between 11.2-million and 12.5-million tonnes of maize is well above the annual consumption of 10.5-million tonnes. There will be a carryover of about 4.2-million tonnes of maize from the 2017-18 marketing year. This will boost supplies in the year starting on May 1.

These developments suggest that the South African maize market could be well supplied in the 2018-19 year.

From the point of view of consumer food security this is a welcome development as it implies that maize prices should remain affordable for some time. On February 13 the white maize spot price was about 36% lower than the same time in 2017, trading at about R1,814 a tonne. But developments elsewhere in the region could overturn this bearish trend.

From 2017 to early 2018, SA experienced weak demand for white maize in its traditional markets on the continent because of large domestic supplies. Given that supplies are now slightly depleted as many countries near the end of their marketing seasons, if the new season crops fail or decline significantly the African markets will invariably look to SA for additional supplies.

On the downside, such a scenario would change the maize price dynamics and have notable effects on the food inflation path.

However, on the upside, elevated maize prices will be a positive for farmers.

Over the coming months weather developments will be the key factor to watch as they have major implications for staple food prices and the health of the agricultural sector.

* Written for and first published in Business Day on 15 February 2018.


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