Crop production has taken a sharp decline in Southern Africa since the beginning of the year as a result of a prolonged dry spell which affected a combination of crops, the Food and Agriculture Organisation (FAO) said in its latest paper.
“Considering the harvest period is expected to commence in May, the likelihood of a recovery is negligible. Cereal harvests, predominantly made up of maize, are therefore expected at below-average levels in 2024, with several areas likely to experience extensive crop failures,” the report said.
Under this poor production outlook, FAO anticipates an uptick in cereal import in 2024/25 and said that maize is likely to be sourced from outside of Southern Africa. Among the individual cereal commodities, imports of white maize, the primary traded grain in the sub region, are forecast to grow the steepest.
“This outlook is underpinned by maize’s paramount importance in Southern African diets and rain fed agricultural systems,” it said.
In addition to availability concerns for maize, food prices in most countries have risen considerably year-on-year due to a combination of economic and agricultural-related factors. Double-digit food inflation rates have persisted in most countries throughout 2023 and the expected decline in agricultural production in 2024 is foreseen to exert additional upward pressure on domestic food prices.
Import costs are also expected to increase in 2024/25, which could drive food inflation. This in part reflects a surge in wholesale maize grain prices in South Africa, where markets reacted to the harsh drought conditions on crops and white maize prices rose by 33 percent between January and March 2024, reaching near-record levels.
“Given the dominant position of South Africa in the sub-region’s maize market, these high price levels are likely to be transferred to net-importing countries,” FAO explained.
Food security across the sub-region is expected to deteriorate significantly in 2024/25 due to the impact of the El Niño drought phenomena. Concerns primarily relate to the effects of a sharp decline in agricultural production on households’ food availability, considering the almost ubiquitous dependence on rain-fed agriculture, and food access, reflecting the confluence of income losses from reduced crop sales and expected supply-driven price hikes.
This combined impact is expected to increase households’ reliance on markets as a source of food, imposing significant financial strains, especially where poverty levels are persistently high.
“Notably, food already accounts for more than 50 percent of an average household’s budgets in most Southern African countries, underscoring the severity of the impending shock,” FAO pointed out in the Special Alert report.
In the March 2024 Food Price Monitoring and Analysis (FPMA) report, FAO also underscores the impending upward pressure on local food prices in Southern Africa as drought sharply curbs cereal production.
The report, which analyses food price trends every month notes that several countries in Southern Africa experienced price spikes in March 2024, as underlying factors, prominently weak currencies, continue to exert inflationary pressure. It further stresses that the effects of drought on agricultural production in 2024 are expected to be a key source of domestic inflationary pressure, given the weight of foods in many Southern African consumer price indexes.
“In the net cereal importing countries of Botswana, Eswatini and Namibia, retail prices of maize meal were generally stable in February 2024,” it said.
However, there are strong upside risks to prices centred on the likely shortfalls in domestic production and the rising prices in South Africa, the countries’ main source of grain supplies.
In South Africa, a key grain supplier in the region, prices of white maize grain continued to rise steeply in March 2024, reaching record levels, as markets reacted to the impact of harsh drought conditions on crops.
Currently, FAO says production forecasts point to a below‑average maize harvest in 2024, with a particularly poor outturn expected for white maize. Rainfall deficits have been less intense over yellow maize growing areas and prices of this grain have risen less drastically as a result. Wholesale wheat prices remained firm in March and at lower year‑on‑year levels, influenced by declining trends in the international market considering the country’s net importing status for wheat.
Earlier this year, the acting Minister of Entrepreneurship, Molebatsi Molebatsi revealed that the Botswana Agricultural Marketing Board (BAMB) has faced a significant shortage of strategic grains in the 2023/24 financial year, which he says has forced the country to look to the Southern Africa region for its grain needs.
Commercial farmers in the Pandamatenga area have expressed concern about the impact of drought on cereal production. They expect little to no sorghum grain from Pandamatenga, one of the country’s large-scale commercial farming blocks.
