A big maize crop following recent rains has pulled South African maize prices to two-year lows, eroding farmers' ability to pay for inputs for the new season, 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 percent more than last year as rain boosted production.
The previous year's crop was hurt by a scorching drought triggered by an El Nino weather pattern, pushing up food prices and fuelling inflation, before rains started pounding South Africa late last year. This year South Africa is likely to export to neighbouring Zimbabwe, which was already relying on maize imports and food aid to meet domestic demand and is now prone to an outbreak of fall armyworm, an invasive South American species that attacks maize.
Industry officials said low grain prices mean farmers will struggle to buy seeds, fertilizer and chemicals, whose prices were high last season because the rand currency was weaker. "When we drop to 2,000 rand ($150) a tonne level, that's not profitable at all to farmers," said Jannie de Villiers, chief executive of Grain SA, which represents grain producers.
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