SA cuts 2015 wheat-output estimate 2.4% on drought

Farmers will probably produce 1.51 million metric tons of the cereal in the 2015-16 season.

South Africa cut its forecast for wheat production this season by 2.4%, according to the Crop Estimates Committee.

Farmers will probably produce 1.51 million metric tons of the cereal in the 2015-16 season, Marda Scheepers, a spokeswoman for the committee, said by phone on Wednesday from the capital, Pretoria. That compares with the 1.5 million-ton median estimate of five analysts surveyed by Bloomberg, and is less than the 1.54 million-ton prediction released by the committee last month. It would be the smallest crop since the 2011 season.

“Persisting drought conditions impacted yields, especially in the Free State,” Scheepers said.

South Africa’s worst drought since 1992 is damaging crops and livestock, with the nation’s weather service predicting below-normal rain for the next four months. The government has declared disaster areas in several provinces of the country that’s the continent’s’ biggest corn and sugar grower.

While South Africa is the sub-Saharan region’s biggest producer of wheat after Ethiopia, it’s still a net importer, according to US Department of Agriculture data. The Swartland area of the Western Cape, the province that 51% of the nation’s cereal came from in 2014, has had its driest season in 75 years, Agri Wes-Cape, a farming lobby group in that region, said in October. Producers in Sandveld are experiencing their worst drought since 1957, it said.

The price of wheat for delivery in March rose 0.6% to R4 610 ($327) a ton by midday on the South African Futures Exchange. Futures have gained 15% so far this year.

The committee raised the malting-barley output forecast by 0.7% to 349 487 tons and kept the canola estimate unchanged at 105 400 tons.

©2015 Bloomberg News

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