Southern Africa Needs Higher Grain Imports Because of Droughtby and
Region will have to source 10.9 million tons of grains
South African food prices may climb as much as 25% by 2017
Southern Africa, parts of which are experiencing the worst drought in more than a century, will need to increase grain imports to meet demand as farmers struggle.
Nations in the region, which includes Zimbabwe, Lesotho, Namibia, Botswana and Swaziland, will need to find 10.9 million metric tons of grains such as corn, wheat, and soybeans, South African Agriculture Minister Senzeni Zokwana told reporters Friday in Pretoria, the capital. This includes 5 million to 6 million tons of corn for South Africa, which is usually a net exporter of the commodity and was last a net importer in the 2008 season.
Last year, rainfall in South Africa was the poorest since records began in 1904, the weather service said Thursday. El Nino, a movement of warm water in the Pacific Ocean that typically leads to a rise in temperatures and a drop in rainfall for the country, has left farmers with what’s expected to be the most meager corn crop since 1995. The nation traditionally supplies its neighbors with white corn, used to make a staple porridge. Farmers have debt of more than 125 billion rand ($7.5 billion) with the country’s banks, the highest on record, according to government figures.
Agri SA, the country’s biggest farmers’ organization, on Friday asked the minister for interest-rate and credit subsidies, Chief Executive Officer Omri van Zyl said.
“The reality is we are sitting with a national emergency,” he told reporters. “There will be a severe cash crunch for farmers when the new planting season starts in June and July. We will only know later this month when the reports come in on how extensive the subsidy requirement will be.”
In the year through April 2015, South Africa’s net corn exports reached 1.9 million tons. The country may run out of white corn by September or October and will have to source non-genetically modified varieties from Brazil, Mexico, and Black Sea nations, Jannie de Villiers, CEO of Grain SA, told reporters Friday.
While South Africa has the capacity to handle the expected influx of grain imports, better coordination and port utilization will be needed, Zokwana said.
It would cost the country as much as 20 billion rand to import 5 million tons of corn, Grain SA economist Wandile Sihlobo said Jan. 11.
The Department of Agriculture has redirected 305.5 million rand from other funds to provide farmers with drought relief, and has committed 66.4 million rand to land-care programs together with the Department of Land Reform, Zokwana said.
The drought may boost food inflation, with prices expected to increase by as much as 25 percent in the year ending April 2017, Ronald Ramabulana, CEO of the National Agricultural Marketing Council, told reporters. Food-price growth was 4.8 percent in November.