Zambian pest plague boosts need for South Africa corn revival

13.01.2017

A recovery in South Africa's maize production has become especially significant, thanks to the growing debts among farmers and the armyworm outbreak wreaking heavy losses on the crop in neighbouring Zambia.

South Africa appears to be heaving for a "good crop" of maize this year, after rains resolved the dryness which dogged the last two harvests, said Wandile Sihlobo, head of economic and agribusiness intelligence at industry group Agbiz.

The crop was being pegged at 11.7m-13m tonnes, he said, a figure which, besides being a vast improved on last year's sub-8m-tonne harvest, would exceed domestic demand of some 10.5m tonnes.

"If we can achieve such a crop," factor which yet depends on rains continuing until February, to improve success of the weather-sensitive pollination process, "we can go back to being a net exporter," Mr Sihlobo told Agrimoney.com.

'Rains arrived on time'

Separately, on Thursday the US Department of Agriculture underlined its expectations of South Africa exporting 1.5m tonnes of maize in 2016-17, some 1.0m tonnes ahead of imports.

That contrasts with an estimate for 2015-16 of net imports of 2.2m tonnes, thanks to the fallout from a second successive drought-depressed harvest.

The USDA said its forecast reflected an estimate for area of 3.1m hectares, up 41% year on year, and a yield of 4.19 tonnes per hectare, slightly above the 10-year trend.

"This year, rains arrived on time and rainfall was extremely favourable for planting during November and December," the USDA said.

Last year, "insufficient rainfall last year prevented successful sowing and plant germination, especially in the western corn belt where a large portion of corn is typically grown".

Zambia factor

South Africa's return to exports has become only more important since the outbreak of armyworm caterpillars in neighbouring Zambia, which has spread to Zimbabwe and Malawi too.

The plague of armyworms – actually moth larvae – has "completely wiped out" some fields, according to the Zambia National Farmers' Union, and reportedly been termed a national crisis by Zambia's vice-president, Inonge Wina.

And, while estimates for Zambia's next corn harvest are difficult to make, the outbreak threatens a drop in exports from a country which "after South Africa, is the largest supplier to the [southern African] region", Mr Sihlobo said.

"Normally, we rely on Zambia to meet some of the regional demand," he said.

If Zambia's output suffers, "that makes South Africa's return to net exports only more important".

Soaring debts

A strong harvest looks crucial financially too for South African farmers who have, thanks to poor harvests, seen their debts spiral.

Official data show that total farming debt for 2015 rose by 14.2% to R133bn, and "some people speak about a figure of R$160bn" for 2016, Mr Sihlobo said.

"Cashflows were not so good."

Machinery market impact

One impact of the rising debt level may to be to "reduce some farmers' ability to further invest in machinery and equipment", he said, after a 2016 for which industry data show South African combine sales falling 14.4% year on year to 186 units.

Tractor sales fell 11.3% at 5,855 vehicles.

However, with tractor volumes, at least, showing some improvement last month, rising by 28% year on year to 349 units, the South African Agricultural Machinery Association was a little more sanguine on prospects.

"Industry expectations for 2017 are that overall tractor sales should be at least as good as those in 2016," said the association's chairman, Lucas Groenewald.


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