Concerns about the size of South Africa’s maize crop remained relevant, given mixed reports received from the various regions, FNB Agriculture head of marketing and agriculture information Dawie Maree said after the Crop Estimates Committee (CEC) predicted an average yield of 3.21 t/ha and 4.24 t/ha for white and yellow maize respectively.

The CEC stated that the size of the expected commercial maize crop had been set at about 9.76-million tons, which was 0.86%, or 84 750 t, less than the previous forecast of about 9.84- million tons.

The production forecast of white maize was 4.65-million tons, which was 1.73%, or 82 000 t, less than the 4.73-million tons of the previous forecast.

In the case of yellow maize, the production forecast was 5.1-million tons, which was 0.05%, or 2 750 t, less than the previous forecast.

“Various sources noted that harvests under dry land conditions do not nearly reach these average yields. Markets anticipated a possible reduction in the size of the crop, with prices reacting upwards the last couple of days,” Maree noted.

Maize prices fluctuated dramatically in February, with the spot price trading higher at R80 or more over ten days and lower at R80 over three days. Since then, it traded more or less sideways, says Maree, but on higher levels. However, maize prices had again experienced upward pressure, especially in the white maize market.

South Africa’s maize market was not only responsible for supplying one of the country’s major staple foods but maize was also still the main input for the animal feed industry.

“We already noted that food price inflation came under pressure owing to the drought conditions [experienced during January and February] and the resulting increase in the maize prices. One can expect that this will continue for the near future,” explained Maree.

He added that livestock farmers, especially in intensive industries such as dairy, poultry and pork, were already feeling the pinch of higher feed prices.

“This, of course, is coupled with increases in other input costs, such as fuel, electricity (if they don’t have load- shedding) and other imported inputs, which all lead to lower profitability.”

Apart from the direct impact of higher food prices, Maree predicted that the knock-on effect of increased inflation could push the South African Reserve Bank to review its outlook of a moderate interest-rate tightening cycle. “Not something the consumer would like.”

FNB highlighted that maize farmers, specifically those in the western parts of the maize belt, were concerned about the next planting season, but Maree noted that FNB was upbeat about agriculture.

With a growing national and global population, growth in the middle-income consumer classes, urbanisation and other factors, such as consumer preferences, demand would increase for food and agricultural products.

“We will continue to invest in agriculture and will assist farmers as far as possible with our different products and within the relevant credit criteria and regulatory environments,” concluded Maree.