The devastating impact of the El Niño climatic phenomenon on crops in southern Africa was felt in a strongly negative way during the months of February and March. El Niño-induced drought and heatwave have severely affected cereal and oilseed harvests in several parts of South Africa.
Despite concerns expressed over growing conditions for summer crops for the 2023-24 season, data recently released by the Crop Estimates Committee revealed slightly upward adjustments to harvest forecasts compared to the previous month. Thus, the cereals and oilseeds harvest for the summer of 2023-24 in South Africa is estimated at 16 million tonnes, showing an increase of 1% compared to the previous month.
However, it is important to emphasize that this upward revision should not be seen as a reason to celebrate. Indeed, these figures do not change the reality that the season was marked by drought and El Niño heat waves that weighed heavily on grain and oilseed harvests in various parts of the country. The estimated harvest of 16 million tonnes represents a 20% drop compared to the 2022-23 production season.
Looking at the detailed data, we see that harvests of white corn and yellow corn could respectively reach 6.4 million tonnes (up 2% compared to the previous month) and 6.9 million tonnes (almost unchanged from the previous month). These revisions place the total corn production estimate at 13.3 million tonnes, up 1% from the previous month.
However, on an annual basis, the white corn harvest shows a decline of 25%, while yellow corn shows a decline of 13% compared to the 2022-23 season. Thus, the expected harvest of 13.3 million tonnes represents a drop of 19% compared to the previous season.
This year’s production is expected to be sufficient to meet South Africa’s annual maize consumption, estimated at around 12 million tonnes, leaving a small amount for export. However, prices could remain high due to potentially limited stocks.
Regional demand in Southern Africa, particularly for white maize, is also an important price support factor. As of April 25, the spot price of white corn stood at R5,477 per tonne, showing an increase of 56% compared to the previous year. For its part, the spot price of yellow maize stood at R4,420 per tonne, showing an increase of 22% compared to the previous year.
On the world market, outside of the Southern Africa region, Mexico is positioned as a major producer of white corn. As the northern hemisphere enters its 2024-25 growing season, it could be opportune for southern African countries that have experienced poor harvests, such as Zimbabwe and Zambia, to partner with Mexico or even the United States, to grow white corn under export contracts to the region.
South Africa is unlikely to be able to meet regional demand even if the forecast harvest of 6.4 million tonnes of white maize materializes.
On the oilseed side, the soybean harvest for the 2023-24 season remained unchanged compared to the previous month, estimated at 1.8 million tonnes (down 35% compared to the previous year). This annual drop is due to lower yields. South Africa is not expected to play a robust role in soybean exports as was the case in the previous season. In fact, importing soybean meal for this new season is now a possibility.
Regarding the sunflower seed harvest, the estimate was increased by 4% compared to the previous month, to stand at 615,000 tonnes (down 15% compared to the previous year). Planted areas are down slightly from the previous year, meaning the main cause of the annual drop in harvest is lower expected yields, particularly given that the majority of Africa’s sunflower crops of the South are planted in western regions which suffered drought and heat waves in February and March.
The recent rainfall in most areas where South Africa’s summer crops are grown comes too late. Crop damage occurred in February and March during the El Niño-induced heatwave and drought. Harvest forecasts reflect this, with major crops showing a notable decline compared to the 2022-23 production season.
However, from a consumer perspective, South Africa is not in crisis. The recent drought poses upside risks to food inflation, but not to the food basket as a whole. The main problem lies in white corn, in view of potentially more robust regional demand later in the year.
Favorable supplies of cereals on the world market, mainly yellow maize (as well as rice and wheat), and moderation in prices mean that South Africa could be slightly spared on these products.
The International Grains Council forecasts a global wheat harvest for the 2023-24 season at 789 million tonnes, significantly above the long-term average. There is currently an abundance of rice around the world, with the overall harvest for the 2023-24 season estimated at 511 million tonnes, well above the long-term average. Finally, the global sunflower seed harvest for the 2023-24 season is forecast at 57.9 million tonnes, well above average.
In conclusion, although South Africa’s summer 2023-24 harvests have been hit hard by harsh weather conditions, the food situation in the country is not critical. Uncertainties persist regarding the ability to meet regional demand, particularly for white corn. However, diversifying supplies into global markets could help alleviate some of the current challenges South Africa faces in the agricultural sector.