GIEWS Country Brief: South Africa 18-October-2019

FOOD SECURITY SNAPSHOT

Favourable seasonal weather outlook and higher year-on-year grain prices likely to instigate expansion in 2020 maize plantings

Cereal production in 2019 estimated at below-average level due to adverse weather conditions

Despite reduced 2019 output, large stocks shored up domestic supplies in 2019/20 marketing year

Prices of maize declined in past three months, but remained higher year on year reflecting production decline

Projected area expansion for 2020 crops

Planting of the 2020 maize crop, to be harvested from April next year, has recently started in the eastern provinces and is expected to progress to western areas by November. Higher year-on-year maize prices, combined with a favourable seasonal weather outlook that points to an increased likelihood of average to above-average rainfall between November 2019 and January 2020, are likely to trigger an expansion in the area planted to maize.

Rainfall deficits resulted in below-average 2019 maize output

The 2019 maize crop was harvested by last June and aggregate production, which combines outputs from the commercial and subsistence farming sectors, is estimated at 11.6 million tonnes, 10 percent lower than the five-year average. The reduced cereal outturn is a result of the rainfall deficits that caused a contraction in the area harvested and lowered yields. Disaggregated by variety, production of white maize, which is mainly produced in western provinces and primarily utilized as food, declined by about 15 percent compared to the previous year's level.

Production of yellow maize, which is mostly utilized as animal feed, decreased by only 7 percent on a yearly basis, as crops are largely concentrated in eastern provinces that were less affected by the rainfall deficits.

Harvesting of the 2019 wheat crop is underway and production is forecast at 1.8 million tonnes, 6 percent above the five-year average. This level is, however, below earlier expectations, due to persistent dry weather conditions in the main wheat-producing province of Western Cape, which have diminished yield prospects.

Adequate cereal supplies in 2019/20 marketing year

In the 2019/20 marketing year (May/April), supplies of maize are estimated to be sufficient to satisfy domestic consumption requirements, but exports are forecast at a below-average level of about 1.4 million tonnes. Normally, white maize accounts for about 40 percent of total maize exports, which are predominantly shipped to neighbouring Southern Africa countries. Yellow maize exports account for the other 60 percent and are mostly delivered to countries outside of the subregion, primarily in Asia. As of mid-October, the bulk of the export quantity has been white maize, reflecting the impact of weather-reduced harvests in other countries of the subregion and consequently higher import requirements.

Although the country is an exporter of maize, about 400 000 tonnes of yellow maize are forecast to be imported to buffer supplies following the lower harvest in 2019. So far, approximately 285 000 tonnes have been imported from Argentina, where the depreciation of the local currency has lowered import costs.

Maize prices higher year on year

Prices of maize grain declined for the third consecutive month in September, following trends in the international market and in response to a slight appreciation of the national currency.

However, prices of yellow and white maize varieties remained above their year-earlier levels on account of the overall reduction in maize supplies compared to the previous year's levels. The higher grain prices have translated into increased costs for consumers, with retail prices of maize meal products rising by about 23 percent on a yearly basis as of August 2019.

Source: Food and Agriculture Organization of the United Nations