SA avoids El Niño crisis

Good news for South African consumers – drought damage to maize crops is less than had been feared.

The El Niño weather phenomenon that caused the recent drought in South Africa is going away, instead of devastating agriculture for two or three years as in the past.

South Africa’s latest crop estimates seem to have confirmed that the country has largely escaped this season’s drought crisis that has enveloped Zimbabwe, Zambia and Malawi. As a result, the country’s feed and food price increases may be moderate.

Analysts have been encouraged by the 1% to 2% increase in crop estimates – small but significant, in view of the devastation that has afflicted countries to our north. 

FNB agricultural economist Paul Makube said in a Bizcommunity article that the rescue had come from late rains that prevented further crop deterioration after damaging heatwaves in January and February. While the maize crop will still be significantly lower than last year, it could have been far worse. 

Makube said higher grain prices could lead to short-term upside pressure on cereals and meat inflation, but “overall inflation is unlikely to spike out of control in the medium term”.

The best news is that this season’s El Niño is not the start of a multi-year event. Forecasts so far indicate that it is transitioning into La Niña (bringing far better weather) which bodes well for the 2024/25 crop season.

“This coupled with strong grain and oilseed prices, and with potentially lower input costs particularly fertilisers, will encourage producers to increase plantings in the next season,” he said.