South Africa's Peanut Crop Failure Is Seen Boosting Imports

  • Nation probably needs to import 20,000 tons in 2016-17 season
  • Next season's groundnut production seen smallest on record

South Africa will probably return to being a net importer of peanuts as the worst drought in living memory cuts the country’s crop to the smallest on record.

The nation may need to bring in 20,000 metric tons of groundnuts, as they’re also known, in the 2016-17 season starting March to supplement local supply, according to Wandile Sihlobo, an economist at farm lobby Grain SA. The country, which was last a net importer in 2013-14, risks losing its position as the third-biggest supplier to Japan.

South Africa had the lowest rainfall last year since records began more than a century ago as the El Nino weather pattern decimated crops of everything from corn to wheat. The nation has declared five regions as drought disaster areas, including the Free State and North West. The Free State and Northern Cape provinces are the main growing areas for groundnuts, accounting for about 70 percent of production last year.

“The current drought did not only affect the bigger crops like your maize, sunflowers and soybeans, but also the small crops” like peanuts, Sihlobo said in a phone interview from Pretoria on Tuesday. “More imports will likely come from other countries outside of Africa because they are in the same state as us.”

Declining Crop

South African farmers may harvest 29,600 tons of groundnuts next season, according to the Crop Estimates Committee. That would be down 48 percent from a year earlier and the lowest amount since at least the 1990-91 season, when the South African Grain Information Service started collecting data.

"Sentiment around the farming community seems to suggest that we might even see a lower crop than what is forecast," Sihlobo said. The Crop Estimates Committee will release the final summer crop data for 2015 at 3:30 p.m. local time.

The country will probably import 10,000 tons of peanuts in the season ending February and ship out 11,800 tons, according to Grain SA forecasts. It didn’t have an estimate for the potential size of net-imports in the coming season.

Mozambique, Malawi, India and the U.S. have been the leading suppliers to South Africa in the last five years, while the country exports out to countries including the Netherlands, Mozambique, Belgium, Egypt, and the U.K., Sihlobo said. China and the U.S. are the biggest providers to Japan.

"Japan is an important peanut market," according to Sihlobo. "We might see Argentina taking our spot" as the third-biggest supplier of peanuts to Japan.

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