South Africa Seen Cutting Corn Outlook to Lowest in Nine Years

  • Area to be planted with corn may remain the same as prior year
  • Wheat production forecast may be kept unchanged, survey shows

South Africa’s corn crop will probably fall 28 percent in the 2015-16 season to the lowest level since 2007 because of damage from the worst drought in more than a century, a survey showed.

Farmers may produce 7.2 million metric tons, the median prediction of nine analysts in a Bloomberg survey shows. That’s 3.2 percent less than a preliminary Jan. 28 forecast of 7.44 million tons by the nation’s Crop Estimates Committee, which updates its figure on Feb. 25, and compares with 9.96 million tons in 2015. The range was 7 million to 7.4 million tons.

The area planted with corn will probably stay unchanged from the year before at 1.995 million hectares (4.9 million acres), six analysts in the survey said. The estimated area sown at the end of January was a quarter less than in 2015 and the smallest since 2006, the committee said last month. 

South Africa, the continent’s largest producer of corn, may need to import 3.8 million tons this year to supplement domestic supplies, according to Grain SA, the biggest lobby group for grain and oilseed farmers. That’s after rainfall last year declined to the least since 1904, when the weather service’s records began. White corn is used as a staple food known locally as pap, while the yellow type is mainly fed to animals.

The wheat-production estimate will probably stay unchanged at 1.5 million tons for the season that ended in September, according to the Bloomberg survey. While South Africa is the sub-Saharan region’s second-biggest producer of wheat, it’s still a net importer, according to the U.S. Department of Agriculture.

“We import up to 70 percent of our wheat and breached the benchmark of 50 percent
self-sufficiency," Wessel Lemmer, a senior agricultural economist at Absa’s agribusiness unit, said in an e-mailed response to questions. "We are losing production capacity for wheat. Farmers simply disinvest in wheat production."

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