Business & Economy

South Africa’s 2015/16 maize crop faces headwinds

South Africa’s 2015/16 maize season faces headwinds as macroeconomic instability and a drought weigh on the prospects for the crop. South Africa has been significantly affected by China’s economic downturn, as it is a key source of demand for its mineral exports, causing a precipitous fall in the Rand.
This has raised the cost of imported inputs—70 percent of all fertilisers and 98 percent of agrochemicals are imported, making up 30-35 percent of total production costs—hurting farmers who are still reeling from the poor 2014/15 crop, which was 31 percent down from the previous season.
This was caused by a severe drought that cut total outturn to 9.8million tonnes, forcing South Africa to import 934,000 tonnes of yellow maize worth $137 million for the 2015/16 fiscal year ending in March. The lingering effects of the drought are set to impact the 2015/16 season. Soil moisture levels are already low, and dryness could be exacerbated by the strong El Niño which typically causes a reduction in average rainfall.
Free State and North West provinces, which produce 46 percent of the country’s maize output, are already experiencing drought-like conditions. A downturn in 2015/16 maize output will lead to higher food prices, causing rising inflation and putting pressure on consumers for whom white maize is a basic food staple.

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