PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 12:21 UK, 14th Jul 2017, by Mike Verdin
South African ag sector recovers - as East African rains fail again

South African farm machinery sales soared last month, in what was taken as a sign of a boost to farmers' confidence from strong crop prospects, even as growers in East Africa are grappling with a third failed rainy season.

South African farmers bought 479 tractors last month, a rise of 24% year on year, according to the South African Agricultural Machinery Association, which flagged "quite positive" market sentiment, amid strong crop hopes.

"As farmers harvest their crops, they are better able to estimate their production," said Lucas Groenewald, the association's chairman.

"Although crop prices are depressed because of the record yields, they are better able to make considered decisions on buying equipment."

'Does boost farmers' confidence'

At industry group AgBiz, Wandile Sihlobo noted the 20 combines sold last month, flagged that, while up just one unit year on year, this did represent the best June figure since 2014.

That was a "season that was also characterised by a bumper crop," Mr Sihlobo said.

"This shows that a large harvest does boost farmers' confidence to invest in equipment."

"While grain and oilseed prices are at lower levels due to large supplies, higher yields per hectare could still compensate for lower prices" in terms of boosting farm incomes.

The US Department of Agriculture on Wednesday restated at a record 16.4m tonnes its estimate of the 2016-17 South African corn harvest, double last season's drought-affected level.

South Africa's crop estimates committee pegs the country's soybean harvest at a record 1.34m tonnes.

'Third consecutive failed rainy season'

However, the latest sign of South Africa's agricultural revival from successive drought-affected seasons came the United Nations cautioned of a "third consecutive failed rainy season" in East Africa, which was "worsening hunger".

Areas including central and southern Somalia, south eastern Ethiopia, northern and eastern Kenya, northern Tanzania and north eastern and south western Uganda have "received less than half of their normal seasonal rainfall".

Some 16m people in these five countries require humanitarian assistance, a rise of 30% since late 2016, the UN food agency, the Food and Agriculture Organization, said.

"In Somalia, almost half of the total population is food insecure," the FAO said, adding that the fall armyworm caterpillar pest had spread to the region from South Africa, only worsening the crop outlook.

"In Kenya, the pest has so far affected about 200,000 hectares of crops."

GM barrier

The situation required "urgent and effective" support, said Dominique Burgeon, the FAO's director of emergencies, noting "surging" grain prices.

"Prices in May were at record to near-record levels in most markets and up to double their year-earlier levels," the FAO said.

However, AgBiz's Wandile Sihlobo, while flagging "large volumes" of South African corn exports to Kenya of late, cautioned that Kenyan curbs on genetically modified crops could put the brakes on the pace of shipments ahead.

"Given that Kenya still has restrictions on the importation of genetically modified maize [corn], South Africa's participation in that market will most likely be limited for the foreseeable future," Mr Sihlobo said.

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