Summer drought takes further toll on EU maize harvest

Hot, dry weather over the past two months has damaged European Union maize (corn) crops and this year's harvest is now expected to be almost as bad as in 2015 when production was also hit by drought.

A field of corn is seen in Kienheim near Strasbourg, France, September 5, 2016.

Consultancy Strategie Grains plans to downgrade its grain maize harvest forecast in its monthly report next week due to take account of dry weather damage in large producing countries such as France, Romania, Bulgaria and Poland, analyst Benoit Fayaud told Reuters.

Better harvests in other major EU maize producers such as Hungary, Italy, Austria and Slovakia would only help cushion the decline, he said.

The 28-member bloc harvested 57.4 million tonnes of maize last year, down from a record 75.7 million in 2014. In its previous report, Strategie Grains cut its output estimate to 60.6 million tonnes from 61.7 million.

The European Commission cut its maize production forecast last week to 62.5 million tonnes from 65.5 million.

"In France crops are not doing very well, mainly in the western part of the country, because of the dry weather over the past two months as well as difficult sowing conditions," Fayaud at Strategie Grains said. "It's a double punishment."

Prior to the recent hot weather, rains delayed maize sowings in the spring in France, the EU's top maize producer.

The trade consensus for this year's harvest in France is about 12.5 million tonnes, which would be the lowest since 2003, although some warn further dry weather forecast in the coming week could make the final result even worse.

"We could fall below 12 million tonnes if these dry conditions continue," one trader said.

France harvested 13.5 million tonnes of grain maize in 2015, farm ministry data showed.

The maize growers union noted that many French crops have been turned into fodder maize because they were too damaged by drought to end the growth cycle, which would dent the final grain maize harvest further.

The grain maize harvest is due to kick off in about 10 days in France while fodder maize cuttings have already started.

In Romania, the harvest is in full swing with results varying widely from one region to another, grain expert Nicolae Sitaru of the APPR maize farmers association said.

"As the campaign is looking now ... we can reach last year's production, but one shouldn't forget that last year was a pretty bad year for maize," Sitaru said.

Romania's 2015 maize harvest fell 26 percent to 8.9 million tonnes at a meager yield of 3.5 tonnes per hectare.

In Hungary, the third EU producer after France and Romania, the maize crop is expected to rise to 7.99 million tonnes this year from 6.6 million tonnes harvest in 2015, official estimates showed on Monday.

Poland, also a large EU maize grower, has experienced dry weather in recent weeks but is set to rebound from a particularly poor 2015 harvest, analysts said.

"Following last year’s poor crop, we may actually harvest a good one this year," analyst Wojtek Sabaranski of Sparks Polska said, pegging the harvest at about 4 million tonnes, up 30 percent.

No end in sight for South Africa's historic drought: government

South Africa remains in the grip of a drought that is not expected to ease soon, a government task team said on Thursday, putting pressure on inflation as the cost of staple foods soars.

Lake St Lucia is almost completely dry due to drought conditions in the iSimangaliso Wetland Park, northeast of Durban, South Africa February 25, 2016.

The long-range forecast showed below normal rainfall expected and "therefore little relief is anticipated in the coming months," local government minister Des van Rooyen, chairman of an inter-ministerial task team on drought, told a media briefing in Cape Town.

Van Rooyen, flanked by Water and Sanitation Minister Nomvula Mokonyane and Agriculture Minister Senzeni Zokwana, said there was no need to declare a national disaster even as the national planting area for maize declined by 30 percent.

The drought has also reduced the national cattle herd by 15 percent with no relief in sight.

"About 370 large commercial farmers around the country... were at risk of going under due to them not being able to service their debts as a result of the drought," he said.

The cost of staple foods, such as maize, has sky rocketed and had a knock-on effect on inflation, the central bank has said. Inflation is running at 6 percent.

Dam levels have fallen to 53 percent as an El Nino weather pattern, which ended in May, triggered drought conditions across southern Africa and placing millions at risk of food shortages.

Large swathes of scorched land decimated the maize crop, with current forecasts pointing to a 26.6 percent lower harvest this year. Temperatures soared to historic peaks in 2015, the driest year since records started in 1904.

Van Rooyen said water restrictions had been imposed in some provinces. Residents and businesses in the economic hub of Johannesburg are being urged to conserve water usage.

Source: Reuters