From a maize-supply perspective, SA is in a relatively strong position. According to recent estimates by the Crop Estimates Committee (CEC), the country’s 2022/23 commercial maize production could reach 16.1-million tonnes, up 5% year-on-year and the third largest on record.
Given that SA’s annual maize need for domestic consumption is roughly 12-million tonnes, the country could have over 3-million tonnes for export markets in the 2023/24 marketing year, which started in May (this marketing year corresponds with the 2022/23 production year).
This ample harvest materialised through farmers’ persistent efforts to plant even beyond the optimal planting window, which closed in December before the entire area of 2.6-million hectares had been planted, as heavy rainfall disrupted activity. Thus, farmers planted some hectares outside this window, and some feared there would be poor yields and frost risks later in the season. Fortunately, the worst did not materialise, and SA expects an abundant maize harvest.
Zimbabwe’s loss, SA’s gain
However, neighbouring Zimbabwe was not as fortunate. Initially, Zimbabwe’s 2022/23 maize production season had a better start than SA’s. Favourable rainfall from October to November allowed farmers to till the land and start planting. But the season hit a dry spell in December, adversely affecting the maize crop in the southern and western areas of the country.
Zimbabwe’s fortunes worsened when the country was hit by Cyclone Freddy in late January, leading to crop damage. The country’s 2022/23 maize production could therefore reach 1.5-million tonnes, almost half of the ample harvest of 2.7-million tonnes in the 2020/21 production season, according to the latest estimates by the Pretoria office of the US agriculture department.
That said, the expected harvest of 1.5-million tonnes is a slight improvement from the 2021/22 production season’s maize harvest of 1.4-million tonnes, but is still 32% lower than Zimbabwe’s annual maize need of 2.2-million tonnes. At face value, the country might have to import about half a million tonnes in the 2023/24 marketing year.
It is also worth considering that the Zimbabwe’s Grain Marketing Board (GMB) has a mandate to maintain a minimum of half a million tonnes of strategic maize reserve in physical stocks. Therefore, the country is likely to require a total of 1-million tonnes of imports in the 2023/24 marketing year.
However, given the poor economic conditions in Zimbabwe currently, it is unclear whether the GMB will be in a position to procure the strategic reserve in full within the 2023/24 marketing year. We will closely monitor the country’s imports pace in the coming months ,as it could lead to a substantial increase in regional maize demand.
Zimbabwe is likely to require a total of 1-million tonnes of maize imports in the 2023/24 marketing year.
Fortunately, SA’s 2023/24 marketing year maize surplus of over 3-million tonnes will help meet the potential rise in exports to Zimbabwe. While the country could import maize from Zambia, it is likely to rely more on SA. Zimbabwe only required maize imports of about 220,000 tonnes in the 2022/23 marketing year. This means there is likely to be increased demand for SA’s maize towards the end of the year.
SA also has established markets in the Far East and Europe, which have consistently remained active in the maize import business. This may be good news for SA maize farmers and traders, but for grain users the potential for increased demand at the end of the year could add upside pressure on prices.
Importantly, unlike Kenya, which prohibits the importation of genetically modified maize, Zimbabwe allows such imports, which opens further room for SA grain exporters.
In addition to this solid regional maize demand, the added upside factor to maize prices at the end of the year into the new year will be uncertainty about the new season crop on the back of an expected El Niño event.
The uncertainty could be an issue, though we hope El Niño will have a mild impact on the 2023/24 production season, because of better soil moisture on the back of four consecutive rainy seasons.
That said, the effect of the expected El Niño on Zimbabwe could again be severe as the country is not using the same farming inputs as SA, specifically drought-resistant seed and certain agrochemicals, and even the level of fertiliser use is lower.
• Sihlobo is chief economist at the Agricultural Business Chamber of SA and a senior fellow in Stellenbosch University’s department of agricultural economics.
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