Potchefstroom - South
Africa, the continent's biggest maize producer, hard hit by an
El Nino-triggered drought last year, is considering a strategic
reserve as a buffer against future shortages, its agriculture
minister told Reuters.
Neighbouring countries such as Zimbabwe and Zambia have such
reserves, but it would entail a significant policy shift in
South Africa, where commercial agriculture is market driven and
the state does not act as a buyer and holder of crops.
A strategic grain reserve usually involves the government
buying crops and taking responsibility for their storage until
they are needed to make up for shortfalls.
"Yes, we are thinking about it," Agriculture Minister
Senzeni Zokwana told Reuters late on Tuesday when asked if a
grain reserve was being considered.
Read also: SA grain industry group sees 2017 maize surplus
"It is one of the things that the inter-ministerial
committee on drought should look at," he said, referring to a
cabinet committee set up in 2015 to look at ways of mitigating
the drought.
Zokwana did not go into specifics, such as budget
allocations for such a project, which would be difficult in
South Africa's strained fiscal environment after damaging
ratings downgrades.
South Africa will likely reap 14.54 million tonnes of maize
in 2017, almost double last year's harvest and its second
largest ever after good rains returned, the government's Crop
Estimates Committee (CEC) said on Tuesday.
This is more than 40 percent more than the roughly 10.5
million tonnes South Africa typically consumes of the crop, the
staple of lower-income households which are a key political base
for the ruling ANC and were hard hit last year by rising food
prices and inflation linked to the drought.
But the El Nino weather pattern, which faded in May of 2016,
may reform again around September, just ahead of South Africa's
maize planting season, according to a number of national and
global forecasts.
"If we have a bumper crop this year how do we make sure that
we have some grain that is reserved for darker days? El Nino is
going to be with us, we have to adapt," Zokwana said, adding
that commercial farmers should also hold some stocks.
"The challenge we are faced with as a country is that we
need to engage with the private sector and say don't sell all
you have because the El Nino may be on the door," Zokwana said.
Some farmers and other market players may be tempted to hang
onto stocks because prices have plummeted with the abrupt change
in weather.
The July white maize contract was 1.25 percent on
Wednesday at R1 862 ($142) a tonne, around 65 percent lower than record peaks of more than 5 000 rand a tonne scaled early
last year during the drought.
El Nino is a warming of ocean surface temperatures in the
eastern and central Pacific that occurs every few years, with
global consequences.
In Africa it often brings excessive rains
to the east while the southern cone gets parched.
($1 = 13.1422 rand).
REUTERS