Grain body sees surplus maize output in 2017

By Olivia Kumwenda-Mtambo and Ed Stoddard

JOHANNESBURG (Reuters) – South Africa is likely to have a maize surplus next year as favourable weather conditions encourage farmers to plant more hectares after a devastating drought last season, the head of the largest grain producer group said on Tuesday.

A good maize harvest would help lower food prices in Africa’s most industrialised country, which in turn could help contain consumer inflation.

An El Nino weather pattern, which ended in May, brought severe drought last season and led to the loss of livestock and the staple maize crop, pushing up food prices.

“The positive thing is that we are starting with a lot more moisture in the soil than last year. The start for the season is very positive although there are some dry patches,” Jannie de Villiers, chief executive of Grain SA, told Reuters in a telephone interview.

“With the conditions as it is at the moment, we can expect a surplus crop,” he said.

South Africa needs 10.5 million tonnes of maize annually to meet local consumption needs.

The South African Weather Services said on Nov. 1 the country was more likely to have a wetter early summer season, from November to January, which is the maize planting season.

The government has pegged the 2016 maize harvest at 7.5 million tonnes, 25 percent smaller than the 9.95 million tonnes reaped the previous year but higher than initial expectations when the drought was really biting.

The government’s Crop Estimates Committee said last month maize farmers intend to plant 2.463 million hectares of the staple grain in the 2017 season, 26.5 percent more than last season.

Commenting on plantings in key maize growing areas, De Villiers said about 85 percent of the area has been planted in the eastern Mpumalanga province, which accounts for 40 percent of the national harvest.

Farmers in the North West province, another key maize growing area, are expected to start planting this week and circumstances “looked good at the moment”, he said.

South Africa’s central bank has expressed concern about the impact of higher food prices on inflation. The bank, which holds a meeting to decide on rates next week, has hiked interest rates since early 2014 to contain price pressures.

The latest figures show consumer inflation was 6.1 percent in September, outside the central bank’s inflation target range of 3 percent to 6 percent.

(Writing by Olivia Kumwenda-Mtambo; Editing by James Macharia and David Evans)