South Africa will cut its 2016 maize forecast by 5.5 percent after late rains failed to compensate for a blistering drought, a Reuters poll of five traders and market analysts showed on Tuesday. The official Crop Estimates Committee (CEC), which will provide its fourth production forecast for the 2016 crop on April 26, is seen pegging the harvest at 6.7 million tonnes compared with last month's estimate of 7.1 million.
That would be a third lower last year's harvest of 9.95 million tonnes. The range was 6.5 million to 6.94 million tonnes. Maize is a staple in Africa's top grain producer and the price of the white variety used for human consumption doubled last year, sending inflation rising to 7 percent in February, its highest in seven years, from 6.2 percent in January. The CEC has consistently produced forecasts this year that have exceeded market predictions, but traders say all of the signs point to a rapidly deteriorating situation.
"The extent of the damage in the Free State and North West is becoming clearer as time progresses," said one trader, referring to the two provinces in the western part of South Africa's maize belt where most of the grain is produced. A powerful El Nino system and other weather patterns combined to trigger an historic drought in South Africa.