National maize stocks hit low
Only a third of the country’s total cereal demand will be met from local production due to poor rainfall in the dryland maize production triangle of Otavi, Tsumeb and Grootfontein. Exacerbating the situation is the further expectation that the mahangu harvest will be less than half of normal, further increasing the demand for white maize. Current cereal stock levels indicate that this process may already have started as consumers switch to maize in the absence of mahangu.
Namib Mills’ Financial Manager, Pieter van Niekerk said to the Economist that the usual 50% contribution from local production of maize, could fall to as low as 35%. As the harvest progresses, the accuracy of these estimates will become more refined.
“The normal Namibian maize crop yields between 60,000 and 70,000 metric tonnes , but due to the current drought, we could see this figure drop to 40,000.”
Preliminary indicators expect that 140,000 tonnes of white maize will have to imported.
Van Niekerk said it is difficult to predict exactly how much maize will have to be imported and that Namib Mills can provide for an additional 20,000 metric tonnes.
Current white maize marketing mechanisms do not allow for the import of white maize during the local white maize marketing period to prevent undercutting by imports.
He however assured that the borders will be kept open to ensure sufficient stock levels. He said once the final crop is available, import prices will be known.
During the financial year of 1 April 2012 to 31 March 2013, marketed white maize production including small harvests in the Zambezi equaled 36,725 tonnes with another 36,000 tonnes from irrigation on an estimated 13,000 hectares.
This was at the height of the previous drought in 2013.
During this period, locally produced grain was sold within the guidelines of the Marketing Agreement between producers such as the Agronomy Producer’s Association, the Likwama Regional Farmers Union and commercial processors form the Namibian Grain Processors’ Association.
Two weeks ago, the Agronomic Producers Association (APA) requested government assistance in preparing farmers for the next planting season given that the current maize harvest is at risk.
“The general sentiment however is that the situation is already critical with only a 35 % crop expected in the dryland areas,” the Namibian Agricultural Union (NAU) said in a statement this week.
The NAU said that the wider economic impact of the poor maize harvest, which is also expected in South Africa, may lead to increasingly expensive fodder and a decrease in weaner prices as the cost to feeding lots increases.
According to the Agronomic Board rain-fed white maize is usually planted in December but at times delayed until January and February the next year, depending on rainfall. The marketing season starts on 1 May and ends on 31 August of the same year or after the domestic production has been bought and milled.
The APA said that it is increasingly aware of the risk to and pressure on farmers who produce under dryland conditions, suggesting the importance of government assistance to ensure that the likelihood of a poor harvest will not put the next planting season at risk.
The NAU’s production cost index shows signs of relief for farmers as expenses have already decreased since the third quarter of 2014. This is mainly attributed to decreases in commodity prices with oil taking the lead.
The Grootfontein/Tsumeb/Otavi area where most of the country’s dryland maize is grown, according to the NAU, had poor and erratic rain meaning that most of these areas will have poor to zero harvests.
The producers association however said that the erratic rain has lead to the paradox where some producers expect a good crop while others suffer.
As an aside, a slightly better crop is expected with the more drought resistant crops such as ground nuts.