Bothaville - A big maize
crop following recent rains has pulled South African maize
prices to two-year lows, eroding farmers' ability to pay for
inputs for the new season, Grain SA said on Friday.
The government's Crop Estimates Committee (CEC) said last
month that Africa's top grain producer will probably harvest
13.918 million tonnes of maize in 2017, 79 percent more than
last year as rain boosted production.
The previous year's crop was hurt by a scorching drought
triggered by an El Nino weather pattern, pushing up food prices
and fuelling inflation, before rains started pounding South
Africa late last year.
This year South Africa is likely to export to neighbouring
Zimbabwe, which was already relying on maize imports and food
aid to meet domestic demand and is now prone to an outbreak of
fall armyworm, an invasive South American species that attacks
maize.
Industry officials said low grain prices mean farmers will
struggle to buy seeds, fertilizer and chemicals, whose prices
were high last season because the rand currency was weaker.
"When we drop to 2,000 rand ($150) a tonne level, that's not
profitable at all to farmers," said Jannie de Villiers, chief
executive of Grain SA, which represents grain producers.
"If they sell the maize that they are going to harvest in
May, June, July, they won't be able to pay off their debts," he
told Reuters, referring to farmers' bank loans. De Villiers was
speaking on the sidelines of an annual agricultural trade fair
in the maize belt west of Johannesburg.
The white maize contract ending in May fell to more
than a two year low on Friday after it closed 24 percent down to
1,950 rand.
De Villiers said the higher prices could put further strain
on farmers who are still recovering from a severe drought,
triggered by an El Nino weather pattern.
"This is going to be an extremely difficult year as well.
Last year with the drought we had zero tonnages and very high
prices, this year we have lots of tonnes but we don't have the
price," he said.
Malawi's maize production may also rise in 2017 by a third
to 3.2 million tonnes despite damage inflicted by the fall
armywormn.
A survey taken at the Bothaville conference by more than 200
farmers showed that as many as 42 percent had not hedged any of
their crop prices before planting, officials said.
The chief economist at the agricultural business chamber,
Wandile Sihlobo, said farmers who had not hedged their maize
prices before the harvest would be squeezed.
Sihlobo was hopeful that the high maize volume and potential
exports could compensate for the low prices that farmers are
expected to get.