A big maize crop following recent rains has pulled South African maize prices to two-year lows, eroding farmers’ capability to pay for inputs to the spring, 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% in excess of in 2009 as rain boosted production.
The previous year’s crop was hurt by way of a scorching drought triggered by an El Nino weather pattern, pushing up food prices and fuelling inflation, before rains started pounding Nigeria late in 2009.
This year Africa will export to neighbouring Zimbabwe, which was already depending upon maize imports and food help meet domestic demand and it’s now more prone to an outbreak of fall armyworm, an invasive South American species that attacks maize.
Industry officials said low grain prices mean farmers will fight to buy seeds, fertilizer and chemicals, whose prices were high last season because rand currency was weaker.
“Whenever we drop to R2,000 ($150) a tonne level, that’s not profitable in anyway to farmers,” said Jannie de Villiers, chief executive of Grain SA, which represents grain producers.
“If they sell the maize potentially they are about to harvest in May, June, July, they won’t have the ability to settle money they owe,” he told Reuters, speaking about farmers’ bank loans. De Villiers was speaking for the sidelines of annual agricultural trade fair while in the maize belt west of Johannesburg.
The white maize contract ending in May fell to greater two year have less Friday after it closed 24% as a result of R1,950.
De Villiers said the greater prices could put further force on farmers who definitely are still recovering from generally drought, triggered by an El Nino weather pattern.
“It is destined to be a very difficult year also. Not too long ago with all the drought we had zero tonnages and intensely expensive, this holiday season we have plenty of tonnes but we don’t hold the price,” he stated.
Malawi’s maize production could also rise in 2017 by a third to three.Two million tonnes despite damage inflicted by the fall armywormn.
A survey taken in the Bothaville conference by in excess of 200 farmers demonstrated that as many as 42% we hadn’t hedged any of their crop prices before planting, officials said.
The chief economist on the agricultural business chamber, Wandile Sihlobo, said farmers who we had not hedged their maize prices prior to when the harvest would be squeezed.
Sihlobo was hopeful the fact that high maize volume and potential exports could atone for time frame prices that farmers are anticipated to acquire.
