SA considers strategic grain reserve as is possible El Nino looms – minister

POTCHEFSTROOM – Nigeria, the continent’s biggest maize producer, hard hit by an El Nino-triggered drought this past year, is considering a strategic reserve as being a buffer against future shortages, its agriculture minister told Reuters.

Neighbouring countries such as Zimbabwe and Zambia have such reserves, nonetheless it would entail an important policy change in Africa, where commercial agriculture is market driven plus the state is not going to act as a purchaser and holder of crops.

A strategic grain reserve usually requires the government buying crops and taking responsibility regarding their storage until they are really had to replace with shortfalls.

“Yes, we have been considering it,” Agriculture Minister Senzeni Zokwana told Reuters late when asked should a grain reserve had been considered.

“Its something the fact that inter-ministerial committee on drought needs to look at,” he explained, dealing with a cabinet committee running on 2015 to view means of mitigating the drought.

Zokwana would not get into specifics, for instance budget allocations for this kind of project, which might be tough in South Africa’s strained fiscal environment after damaging ratings downgrades.

South Africa will in all probability 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 .

This is far more than 40% a lot more than the roughly 10.5 million tonnes Africa typically consumes of the crop, the staple of lower-income households that can be an important political base for the ruling ANC and were hard hit a year ago 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 before South Africa’s maize early spring, reported by a number of national and global forecasts.

“When we have a very bumper crop this current year how should we make perfectly sure that we have some grain that may be reserved for darker days? El Nino shall be with us, we will have to adapt,” Zokwana said, adding that commercial farmers also need to hold some stocks.

“Task we’re confronted by to be a country is the fact that we should instead engage the non-public sector and say don’t sell lessons given that the El Nino may very well be on the door,” Zokwana said.

Some farmers together with other market players can be tempted to keep hold of stocks because prices have plummeted when using the abrupt improvements on weather.

The July white maize contract was 1.25% on Wednesday atR 1 862 rand ($142) a tonne, around 65% below record peaks of greater than R5 000 a tonne scaled early not too long ago in the drought.

El Nino may be a warming of ocean surface temperatures in the eastern and central Pacific that happens every several years, with global consequences. In Africa there are many challenges brings excessive rains to your east even though the southern cone gets parched. ($1 = R13.1422)