Thanks to ample rain, this year’s maize harvest is expected to be much larger than last year’s meagre 1,5 million tonne.
On Thursday (26/01), the National Crop Estimates Committee (NCEC) estimated a yield of approximately 12 million tonne.
It is possible that a decrease in the prices of staple food might be seen in the third term. According to Hamlet Hlomendlini, senior economist of Agri SA, this is thanks to the good rainfall since October 2016, that increased the production of maize.
He agreed with other economists that the inflation rate of 6,8%, at a ten-month climax, might be the turning point in the upward cycle.
The staggering effects of the drought in 2016 caused a sharp increase in food inflation over the past few months and a decline in the gross domestic product (GDP).
“We estimate more mode-
rate prices in 2017, as the new season’s production prospects improve,” Paul Makube, senior agriculture economist of FNB, said.
He warned that the rand-dollar exchange rate should be monitored closely, as the weaker rand might cancel the advantage of lower grain prices.
According to Anthony Clark, Vuvani Security analyst, the agricultural group Senwes believes the maize harvest can reach a healthy 13 million tonne.
In the case of good rainfall in February, this might even be as high as 14 million tonne.
Prospects of rainfall in February are favourable, according to Johan van den Berg, manager of specialised crop insurance at Santam.
“Neutral to weak La Niña conditions are reigning and the sea surface temperature of the Indian Ocean looks to be neutral. Chances are that, by winter, the draught will be a thing of the past.”