STRUG­GLING AGAIN

Finweek English Edition - - Economic trends & analysis - JO­HANN VAN ZYL

SOUTH AFRICA’S worst agri­cul­tural year since the in­fa­mous 1991 sea­son, one of the worst in his­tory, con­firms how de­pen­dent the agri­cul­tural in­dus­try is on the weather. The prospects for this sea­son, and un­for­tu­nately also for the long term, don’t look good.

First Na­tional Bank agri­cul­tural econ­o­mist Ernst Janovsky says the cur­rent high maize price – al­ready more than R1 800/ton, as against R500/tons two years ago – is the sum to­tal of high in­ter­na­tional prices (which will prob­a­bly re­main high) and the drought. He says the bad weather may even push the price up to more than R2 000/ton.

The drought is even af­fect­ing drought-re­sis­tant crops like sun­flower. Af­gri Com­mer­cial and Lo­gis­tics CEO Wouter Mentz says very low roll-over stock­piles of 60% less than the av­er­age can also push prices up con­sid­er­ably.

The ef­fect of global warm­ing as a re­sult of the green­house phe­nom­e­non is in­creas­ing. Sci­en­tists pre­dict that tem­per­a­tures could in­crease by 10% within decades, but they’re still not sure whether the rain­fall will de­crease ac­cord­ingly.

Luke Sand­ham of the School for En­vi­ron­men­tal Sci­ences at North-West Univer­sity says droughts could be more in­tense and flood­ing could in­crease, with se­ri­ous con­se­quences for agri­cul­ture. And, like this year, droughts could start oc­cur­ring once ev­ery six years on av­er­age, and no longer once ev­ery eight years.

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