SA maize crop will be at least twice than what it was last year

THIS year’s maize harvest more than doubled from last year’s and was well above the consensus forecasts of grain traders, according to the fourth 2017 estimate by the Crop Estimates Committee released on Friday.

The higher-than-expected maize crop is good news for consumers and South Africa’s balance of payments, but bad news for farmers as the increased supply will lower the maize price.

Wandile Silhobo, the agricultural economist at the Agricultural Business Chamber, said that the consensus forecast from one news agency had been 14.73 million tons, while the consensus forecast from another news agency had been only 14.66m tons. The third crop estimate in April had been for a 14.536m tons harvest. The previous record was set in 1981 at 14.656m tons when 65 percent more area was planted to maize.

Paul Makube, an agricultural economist with First National Bank, said the large maize crop would be a boon to consumers and other end-users such as poultry producers.

”All this bodes well for food inflation going forward. Expect further deceleration in food inflation in the months ahead, which should provide some comfort for the South African Reserve Bank.

“Livestock producers are smiling again, particularly the poultry industry, which has been under severe strain. The improved meat-maize ratios in the pork, poultry and beef feed lots will improve profitability in these sectors,” he said.

Annual food price inflation has already fallen from 12 percent in October last year to 6.6 percent in April this year and further easing in food inflation is expected in the months ahead as the maize is harvested from May to August.