South Africa May Double White-Corn Output on La Nina, BVG Says

19.08.2016

South Africa, the continent’s largest producer of corn, is set to double production of the white variety next year if rains from the anticipated La Nina weather event come to end the worst drought on record, a grains trader from BVG (Pty) said.

The nation will probably produce 6 million to 6.5 million tons of white corn in 2017 if rains fall, Brink van Wyk of BVG said in an e-mailed response to questions Wednesday. Local farmers will probably harvest 3.1 million tons of white corn this season, or 53 percent less than a year earlier, the nation’s Crop Estimates Committee said in July.

“The fact that there are indications of a La Nina developing also creates expectations of an above-average crop,” Van Wyk said. “With good rainfall, prices should go down from current levels, even to export parity if it is a really big crop.”

Meteorologists are forecasting an increasing likelihood of the rain- and flood-inducing La Nina taking place from late spring, or about October, in South Africa, according to the Agricultural Business Chamber. The El Nino-induced drought has damaged crops and herds and raised food prices. The price of white corn, used to make a staple food, has more than doubled since the start of 2015 and the country is set to produce the smallest crop of the white and yellow varieties since 2008 this year.

White corn for delivery in July 2017 is at 2,855 rand ($214) a ton on the South African Futures Exchange in Johannesburg. That is 34 percent lower than the December contract’s price of 4,304 rand a ton. Outside of southern Africa, only Mexico is a major producer of white corn, and it doesn’t have a lot to export, according to Oxfam.


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