Weather
Better crops may
be on their way
La Niña could
moderate SA food
price inflation
by Paul Makube, Senior Agricultural Economist at FNB
A
s South Africa gets closer to the predicted weakening
of the El Nino pattern, and a transition into La
Niña, there is a high probability of above normal
rainfall early in summer, which would lead to a good
2016/17 crop season.
Should weather forecasts remain
on course, we can expect
agricultural production to bounce
back by mid-2017 resulting in
significant moderation in food
prices, particularly grains. Fruit
and vegetable prices could also
ease towards the end of the year
as conditions improve.
Due to the impact of the drought,
the country will be a net importer
of maize this year as a result
of domestic supply shortages.
We experienced a shortage of
both the yellow and white maize
which are commonly used for
livestock feed and staple food,
respectively. The sector also shed
an estimated 37 000 jobs in the
fourth quarter last year.
Relief
This coupled with a weak Rand led
to an excessive increase in food
price inflation directly impacting
lower
income
households
across the country.
Although the impact of La Nina
will not be felt immediately it
will bring long term relief to
struggling consumers that are
currently finding it difficult to
make ends-meet.
Favourable changes in weather
patterns could result in South
Africa producing enough maize
during the 2016/17 season
as production is dependent on
rainfall during growing season
which is normally between
October and April.
A good rainfall season will lead to
lower grain prices and improved
grazing conditions for livestock
farmers who would be entering a
herd rebuilding phase. This would
directly result in a moderation of
meat (pork, poultry) and dairy
prices. In the case of beef, prices
are however expected to remain
elevated due to supply tightness
as herd rebuilding takes a bit
longer. South Africa would also
be in a good position to recoup its
losses and grow its export revenue
for next year.
x-head: Small-scale farmers
Moreover, small-scale farmers
who are also finding it difficult
to produce enough food to feed
their families would also breathe a
sigh of relief.
On a positive note, dam levels in
the Western Cape have shown a
slight recovery in recent weeks.
The medium to longer term
rainfall outlook for the province is
relatively good with light showers
expected which will be beneficial
for the winter crop. It will also
replenish dam levels and possibly
help ease water restrictions
for the region.
However, the situation for the
rest of the country is expected to
remain unchanged until we get
La Nina induced rainfall in spring
or early summer.
Despite the benefits of La Nina,
it will take commercial farmers
about two years to fully recoup
financial losses incurred due
to the drought.
As the uncertainty around weather
patterns continues to increase due
to climate change, it is important
for farmers to explore new farming
technology and strategies to
ensure sustainability of agriculture
and food security.
AUGUST/SEPTEMBER 2016
31