The drought currently devastating parts of South Africa, notably in the Free State, North West and the Northern Cape, Limpopo, and KwaZulu-Natal, where staples like yellow maize, white maize, soya beans and sunflowers are farmed, is set to cost farmers in the region of ten billion rand this year.
According to a report by the United Nation’s Food and Nutrition working group, the drought, the worst to hit South Africa since 1992, has already caused a major decline in maize production that has led to an increase of around 6.4% in food prices, and the 2015 harvest is set to be the worst in 8 years.
John Purchase, CEO of Agricultural Business Chamber Agbiz stated that it is difficult to quantify the cost of the drought, “Just the maize crop is down from 14.25 million tons
According to Grain SA chief executive Jannie de Villiers, South Africa will have barely sufficient white maize to feed its citizens, and would need to import around 700 000 tons of yellow maize to feed livestock, at a cost of approximately R1.96 billion to farmers. “From May this year to January next year, we can expect an additional increase of between 15% and 20% in the maize meal price,†he said.
Researchers working on the Studies in Poverty and Inequality Institute (SPII) Basic Needs Basket Project, which monitors the prices of 39 services and goods countrywide on a monthly basis fear the effects could be worse. According to the study, the price of maize meal shot up 29% in Gauteng, 34% in North West, and a whopping 37% in urban areas in the Free State. Rural prices increased by 39% in the Free State and 25% in Gauteng. Samp, another staple, increased in price by 41% in the Free State urban areas and by 38% in North West urban areas.
Many large brands that rely on these areas for raw produce will now have to import, and this effect will be felt in the economy as food prices rise between August and November, hitting the public once more with increased prices that they cannot afford on top of recent price increases in fuel and electricity.
South Africa’s GDP figures for agriculture were 16.6% negative growth in quarter 1, and Agbiz expects quarters 2 and 3 to be even worse. Ernst Janovsky, Absa’s agribusiness head, says that the extent of the problems caused by the prolonged drought would only be seen next year.
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