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Agri industry South Africa again deals with drought and disease

South Africa’s agricultural sector has seen the bad start of the 2018/19 production year (that was characterised by drought for summer crops and foot-and-mouth disease for livestock) return.

First, the South African Weather Service currently forecasts below-average rainfall between November 2019 and January 2020 in the eastern regions of South Africa, specifically parts of Limpopo, Mpumalanga and KwaZulu-Natal. From January 2020 onwards, the projected likelihood of dryness across South Africa is higher compared to the September forecast. Temperatures are also set to be higher than normal over this period, which makes matters worse.

While it is too early to ascertain a possible impact of this on production, and thereafter food price inflation and growth of the sector, it is believed that the 2019/20 summer crop production season might not be as good as initially anticipated. Moreover, there is doubt whether farmers would increase summer crop plantings by 7% year-on-year (year-on-year) in the 2019/20 production season to 3,9 million hectares as initially anticipated under the aforementioned weather conditions.

This unwelcoming outlook is mirrored by reduced activity on farms at the moment because of the dry soil. In a normal rainy season, crop plantings would be in full swing in KwaZulu-Natal, Mpumalanga, Eastern Cape, Limpopo and eastern Free State by this time of the year as optimal planting time for crops such as maize closes this week. But this year, there are delays in planting.

Looking back, the 2018/19 production season drought resulted in maize, sunflower seed and soya bean production declining by 11%, 21% and 24% year-on-year, respectively. Fortunately, South Africa did not experience a supply shortfall, especially in the case of maize because of large stocks from the 2017/18 production year which ensured that the country remained a net exporter of maize. In the case of soya bean oil cake, however, imports are likely to lift by roughly 18% year-on-year to 550,000 tons. Similarly, sunflower oil imports could increase somewhat following a major decline in production. In the event of a poor harvest in the 2019/20 production season, the requirements of the imports in the 2020/21 marketing year would be wider as stocks are generally lower than in the previous seasons.


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