FAO Sees Higher Southern Africa Corn Prices as 2015 Crop Shrinks

This year’s corn harvest in southern Africa, which relies on the grain to make a staple food, will probably shrink 26 percent from 2014 because of erratic rains, raising food prices and increasing the need for imports, the United Nations’ Food and Agriculture Organization said.

Regional output this year is forecast at 21.1 million metric tons, or 15 percent lower than the five-year average, the FAO said in an e-mailed statement.

The worst drought since 1992 in South Africa, the continent’s biggest corn producer and traditional supplier of its neighbors, has damaged plants, with the nation predicting a 32 percent drop in the 2015 harvest to the smallest in eight years. Botswana said crops are showing signs of “total failure” due to below-average rainfall, while floods in Malawi and Mozambique have curbed production.

“The bulk of the growth in imports is expected from South Africa, mainly consisting of yellow maize used in the feed industry,” the FAO said. Corn imports for the year through April 30, 2016, may rise to about 1.8 million tons, or “double the low level of 2014-15 and one-third above the average. Price increases are expected to mostly affect those countries that rely more on maize imports such as Namibia.”

South African prices of white corn, used to make a staple food known locally as pap, nshima in Zambia and sadza in Zimbabwe, has climbed 21 percent this year. The yellow type, which is used as animal feed, rose 8.8 percent in the same period.

“The carry-over stocks from 2014’s bumper maize crop is expected to partly offset the impact of lower domestic production and somewhat contribute to stabilizing national supplies in some countries,” David Phiri, the FAO’s subregional coordinator for the region, said in a separate statement.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE