South African corn production will fall back sharply next year, as falling prices weigh on planting, US officials said.
After two years of drought-reduced production, followed by the current bumper harvest, the crop will fall back to more normal levels next year, the US Department of Agriculture's Pretoria bureau said. "Expected lower local corn price levels will put downward pressure on the area to be planted with corn later in 2017," the bureau said.
Commercial planting of white and yellow corn are forecast down 9% year-on-year, at 2.40m hectares. Including corn planting by small-scale substance growers, total corn plantings will be down some 7.5%, at 2.80m hectares.
Corn prices in Johannesburg are currently breaking two-year lows, under pressure from the nearing harvest, with May white corn futures at 1,965 rand a tonne, and May Yellow corn futures at 2,080 rand a tonne.
White corn less attractive
Sowings of white corn in particular, which is used to for human consumption in the form of the country's staple food mealie meal, are expected to tumble. The bureau forecast a 15% drop in the area planted to commercial white corn, to 1.4m hectares. Yellow corn plantings will stay at around normal levels, the bureau said, as the level was not particularly elevated.
Assuming normal climatic conditions and yields, South African corn crop is forecast to fall by 18% to 12.0m tonnes, from the record levels seen in this year's harvest.
High prices boost plantings for this year's crop
The fall in plantings follows the very large levels seen for this year's harvest. After two years of drought, a combination of high prices and good climatic conditions encouraged a massive boost in plantings, particularly for white corn, which is hard to import as there are very few countries that produce the variety commercially. And with continued good conditions, yield expectations are also strong.
"The good rainfall between October and December of last year in many of the areas of South Africa that were affected by the severe drought the previous season was followed by even better rainfall in February," the bureau said.
No fall army worm problems
Although the fall army worm, which is devastating production in some other countries in the region, has been detected in South Africa, any impact on production will be "limited," the bureau said.
More than 85 percent of the South African corn crop has been planted with genetically engineered seed resistant to the pest, and the government has moved quickly to allow register many commercial pesticides for use by producers. This leaves hopes for this year's corn harvest at 14.6 m hectares, up 78% year-on-year
Extracted from "agrimoney.com," 30th March 2017