SOUTH AFRICA – SA will most likely harvest 7.44-million tonnes of maize in 2016, 25% less than the 9.94-million tonnes reaped last year, because of a scorching drought, the Crop Estimates Committee (CEC) said on Wednesday.

The forecast harvest, which the CEC said would be the smallest crop since 2007, was 8.5% higher than market expectations of 6.86-million tonnes, according to a Reuters’ poll of traders.

The maize crop will consist of an estimated 3.27-million tonnes of white maize and just more than 4.17-million tonnes of yellow maize, the CEC said in its maiden forecast for this year’s crop, which it provided a month earlier than usual to assist policy makers plan for potential shortages.

The government has estimated that up to 6-million tonnes of maize may need to be imported this year, more than half of the country’s needs.

Domestic maize prices have been scaling record peaks as drought concerns have mounted after SA last year recorded its lowest rainfall levels since record-keeping began in 1904.

The central bank, which is expected to raise interest rates on Thursday, has repeatedly expressed concern about the drought and its effect on inflation, which accelerated to 5.2% in December from 4.8% in November.

The situation is especially worrying for the white variety of maize, which is the staple source of calories for many households and is not widely grown outside of the region. Yellow maize, used for livestock, can be easily sourced elsewhere.

An El Nino weather pattern is forecast to keep much of the maize belt hot and dry until the end of the growing season in April, and record-high temperatures were posted in many parts of SA earlier in January.

The country’s maize farmers are estimated to have planted 1.99-million hectares for the 2016 season, down 25% from the 2.65-million hectares they seeded last year because of the drought, the CEC said – Reuters

February 1, 2016;