Food prices likely to fall as RSA expects a record maize harvest

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Staff Reporter

Windhoek-South Africa, exporting some 160,000 tonnes of white maize annually to Namibia, is forecast to harvest a record 15.6 million tonnes of maize in 2017, double last year’s output after favourable weather conditions lifted yields, the government’s Crop Estimates Committee (CEC) said last week.

The record SA forecast and a somewhat 40 percent better harvest from Namibia’s white maize producers may further depress maize prices, which will help brake inflation and food prices while cutting the margins for farmers, many of whom have high debts.

The fourth production forecast for the season, which is almost six percent higher than market expectations of 14.73 million tonnes, will be the largest crop since 1981 when it reached 14.656 million tonnes, the CEC said. The previous forecast called for a crop of 14.54 million tonnes.

The CEC said the crop will comprise an estimated 9.4 million tonnes of white maize, the regional staple mostly used for human consumption, and almost 6.2 million tonnes of yellow, the bulk of which goes to animal feed.

The 2016 harvest was only 7.78 million tonnes, with yields impacted by a drought triggered by an El Nino weather pattern, pushing up food prices and fuelling inflation. Namibia’s white maize harvest, staple diet of the people, also dropped by some 40 percent and close to 700 000 inhabitants were eventually dependent on government’s drought food aid programme which was extended to April of this year.

The record maize harvest will be more than 100% higher than in 2016.
In its fourth production estimate report for the year, the Crop Estimates Committee said last week it had revised the maize output estimate 7.54% higher against the previous estimate.

Favourable weather conditions enabled farmers to increase the area planted for summer crops, with maize output now expected to be 101% more in 2017 than it was in 2016.
Namibia is also expecting a bumper harvest of more than 70 000 tonnes of white maize this season.

The expected crop has already led to a significant decrease in grain prices in anticipation of the harvest. The benefits of the bumper crop include lower food prices for consumers. Consumer inflation has been slowing steadily this year. Inflation for April came in better than expected last week in SA at an increase of 5.3% from a year earlier.

The white maize futures contracts for July delivery settled at N$1,735 per tonne on the JSE’s commodity derivatives market last week. This was down considerably from N$5,000 per tonne just over a year ago.

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