Mealie bonanza on the menu
Good rains mean plenty of pap — for now
THE back of the drought appears to be broken — at least temporarily — and South African farmers are looking forward to reaping the rewards.
South Africa is set to export nearly 3.8 million tons of maize thanks to the recent good rains which could result in a near-record crop. Dirk Strydom, manager of Grain South Africa’s grain economy and marketing department, said Asia and Mexico could be among customers for the maize, depending on the type.
South Africa, which consumes about 10.5 million tons of maize a year, normally exports to nearby countries such as Botswana, Lesotho, Swaziland, Zimbabwe and Malawi.
“To break even on supply and demand, South Africa needs close to 3.8 million tons of exports,” Strydom said. “However, historically we do not export the full [surplus] and sometimes sit with a large carry-over stock level. The amount of exports will largely depend on logistical capacity.”
South Africa last enjoyed bumper exports (of 2.5 million tons) during the 2011-12 marketing year. Most was shipped through Durban.
Local maize is often of a higher quality than that from the US, for example, partly because it is sundried and harder.
“It depends on the type of maize but Asian countries and Mexico will specifically be target markets,” Strydom said.
Grain South Africa, which represents commercial grain farmers, has been pleased with the recent rains in the summer-rainfall areas.
“We are currently looking at a possible second-largest crop of all time,” said Strydom. “However, with this large crop, according to the crop estimates committee report, prices are under pressure and in some places below break-even levels.”
He said this created financial challenges for producers, especially because of droughts in previous years that have left farmers in debt.
“This is why it is so important that exports take place so that prices can stabilise above break-even levels,
We are looking at a possible second-largest crop of all time. However, prices are under pressure
otherwise producers will not obtain credit for the next season and that can then lead to lower production and higher food prices.”
In recent months, South African maize farmers have been concerned about possible outbreaks of the fall armyworm, a pest that has hit crops in the northern parts of the country. The government says it is monitoring the impact and spread of the fall armyworm.
It has caused widespread damage to crops in Zimbabwe, Malawi, Zambia, Namibia and Mozambique.
Agri South Africa’s deputy executive director, Johan Pienaar, said the armyworm situation seemed to be under control and the expected maize crop was testimony to this.
“In a sense this was also a wake-up call and we will have to become more proactive in terms of identifying and responding to these occurrences,” Pienaar said.
“Agri SA will engage with the Department of Agriculture, Forestry and Fisheries in this regard with the view to having this declared as a migratory pest, like locusts, which can hopefully lead to a formalised and official system as to how to also deal with armyworms in future.”
Last month the Department of Agriculture, Forestry and Fisheries activated an emergency team to help fight the fall armyworm plague.
Pienaar said that with the expected maize crop likely to be almost double that of last year, exports would resume. He estimated they could reach about four million tons.
“The latest crop estimate of 14.3 million tons supports this notion as it will exceed local demand considerably. This increased crop will obviously exercise a knock-on effect on food inflation via prices, although moderately given the limited weight of bread and cereals in the inflation basket,” Pienaar said.
Although some areas of South Africa were still in the grip of drought, the situation had generally also improved for livestock production, he said. However, farmers were rebuilding their herds after last year’s drought, which could lead to reduced supplies of meat and a delay in terms of lower prices.
“Given the weight of meat prices in the inflation index being relatively high, and that meat prices will remain relatively high for the foreseeable future, the impact of better rain on food inflation will remain subdued in the short to medium term,” Pienaar said.
But the situation in the winterrainfall Western Cape remained desperate, with dam levels on average at 25% of capacity.
“This region, being reliant on irrigation . . . will obviously need significant rainfall to enable the agricultural sector to maintain its export performance and its contribution to the general economy and to the specific regional economy,” he said.
But South Africa’s relief at this summer’s good rains could be shortlived. The government said this week El Niño conditions, which usually bring drought, were likely to return in spring this year.
This was also a wake-up call and we will have to become more proactive in terms of responding