Drought fuels the need to import maize | Fin24
 
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Drought fuels the need to import maize

Nov 29 2015 18:00
Xolani Mbanjwa

Johannesburg - The crippling drought has forced South Africa to become a net importer of maize for the first time in seven years.

This comes as the agricultural sector is expected to shrink by another double-digit figure when Stats SA releases the fourth-quarter numbers early next year, Agri SA said this week.

The sector took the sharpest decline, of 12.6%, between July and September, according to gross domestic product (GDP) numbers released this week, and the industry is less optimistic about the possibility of rain before March.

Thabi Nkosi, Agri SA’s senior economist, said most farmers had still not planted their maize and sugar crops, and would not unless it rained by the end of next month.

“The period from October to November is the planting season, and we have not seen any rain; therefore the manufacturing sector is also taking a knock, particularly the food and beverages industry because that entire value chain is overexposed to the effects of the drought.

“Both sectors are interconnected, but the good thing for us is that we can import – unlike most of those in the manufacturing sector,” said Nkosi.

If the drought persisted to March, Nkosi said every sector would start feeling the effects, including people who lived in urban areas.

“Whether you’re in the rural parts of South Africa or in the cities, we will all start to feel the effects if rain doesn’t fall,” said Nkosi.

Farmers, including those who had lost tens of thousands of livestock animals, would continue to count the costs of the drought even as national and provincial government pumped hundreds of millions of rands into drought relief.

Michael Manamela, Stats SA’s executive manager, said the biggest contributors to the 0.7% GDP growth were the manufacturing sector, a leading industry at 6.2%, followed by finance at 2.8%, trade at 2.5% and small contributions from the other industries.

Mining experienced the second-worst decline, at 9.8%, between July and September, followed by electricity generation and sales, which showed an 8% drop.

agribusiness  |  drought
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