Business Maverick


El Niño looms, boding ill for SA agriculture and food inflation

El Niño looms, boding ill for SA agriculture and food inflation
Dried maize plants in a drought-hit field in Lichtenburg, North West in 2015. (Photo: Waldo Swiegers / Bloomberg via Getty Images)

We’ve enjoyed three years of plentiful rains and bumper grain harvests, thanks to a La Niña in the Pacific. But that’s all likely to change soon, with unhappy consequences for local food prices.

An unusually stubborn La Niña has ended after a three-year run and the tropical Pacific is in an Enso-neutral state (neither El Niño nor La Niña), according to the Geneva-based World Meteorological Organization (WMO).

“There is a 60% chance for a transition from Enso-neutral to El Niño during May-July 2023, and this will increase to about 70% in June-August and 80% between July and September.”

This update from the WMO is the latest from a range of weather forecasters worldwide who predict an El Niño this year. The prospects have been increasing and the timeline shortening.

This may have serious consequences for South Africa’s battered economy, notably the agricultural sector and food prices, as El Niño — triggered by a warming of surface temperatures in the eastern Pacific Ocean — typically heralds drought in southern Africa. Ocean surface temperatures in April reached record highs.

The prolonged La Niña, caused by a cooling of the same waters, was one of the few bright spots for South Africa’s economy as it usually brings drenching rains to the region. And it delivered, with bumper harvests for many crops and dams brimming with water.

South Africa’s maize haul for 2023, according to the latest forecast from the government’s Crop Estimates Committee (CEC), is expected to be just shy of 15.9 million tonnes, compared with 15.57 million tonnes in 2022. In 2021 it reached 16.35 million tonnes.

This represents a trio on the trot of stout harvests in the face of challenges such as power shortages and soaring input costs. The record maize crop in 2017 was 16.82 million tonnes.

Read more on Daily Maverick: As El Niño looms, SA’s southwest may be in for a dry autumn/winter; northeast in for a wet one

Dam levels have also reaped the rewards of La Niña. According to the latest State of the Dams report by the Department of Water and Sanitation, four provinces — Mpumalanga, Gauteng, KwaZulu-Natal and Free State — have average dam levels above 90%.

Limpopo, North West and Northern Cape are above the 80% mark, with Eastern Cape at 76.7% and Western Cape relatively dry at 52.9%.

Food inflation

The expected return of El Niño, especially if it is intense, will evaporate much of La Niña’s legacy at a time when food price inflation should be slowing.

Indeed, despite the bounty produced by La Niña’s rains — aided by advancements in agricultural technology such as GPS-guided “precision farming” — South African food inflation has been galloping because of the power shortages and global factors such as Russia’s invasion of Ukraine.

Food inflation in South Africa raced to a 14-year high of 14.4% in March. At a time of declining wages and rising interest rates to contain inflation, the “cost-of-living” crisis is only worsening.

Economists generally expect the wider inflation rate — 7.1% in March — along with food prices to abate soon. But El Niño could scorch those prospects as the year unfolds and farmers begin planting for the next summer grain season. Their “intentions to plant” will inform the CEC’s estimates about the size of the area to be seeded and traders will infer from that the potential size of the next grain crop.

A few things are worth keeping in mind about the increasingly likely reappearance of El Niño.  

The first is that the last one, in 2015-16 — with a “very strong” rating — was ruinous. In 2016, South Africa’s maize crop was only around 7.8 million tonnes, about half of what is being sent to silos now.

South Africa’s consumption of the staple white maize and the yellow variety mostly used for livestock is around 11.3 million tonnes, according to the Agricultural Business Chamber of SA.

So an El Niño could switch South Africa from a net maize exporter to a net maize importer, and who knows what the rand-dollar exchange rate will be then? If it’s much weaker than current levels above R18 to the dollar, the spectre of surging food inflation would again stalk the land.

Livestock farmers hard-hit

And it’s not just grain crops that are a source of concern. Among others, South African livestock farmers were hard-hit by the last El Niño, driving up the price of meat, a trend also fuelled by the yellow maize shortage. Small-scale farmers in the former homelands, for whom cattle is a coveted source of wealth, were devastated.

One academic study published in 2020 in the African Journal of Range and Forage Science found that such livestock farmers in Msinga in KwaZulu-Natal lost 43% of their cattle herd to the last El Niño and 29% of their goats.

“Three years after the drought, cattle numbers remained depressed, whereas goat numbers had recovered,” the study pointedly noted. So herds that may have finally recovered to their pre-El Niño numbers could be culled again.

The other thing to keep in mind is that in April, the temperature of the world’s ocean surface scaled record highs since satellite records began, according to the US National Oceanic and Atmospheric Administration. The average ocean surface temperature reached 21.1°C, beating the previous record of 21°C set in 2016 — during the last El Niño.

El Niño, of course, is a consequence of high eastern Pacific surface temperatures.

“We just had the eight warmest years on record, even though we had a cooling La Niña for the past three years and this acted as a temporary brake on global temperature increase. The development of an El Niño will most likely lead to a new spike in global heating and increase the chance of breaking temperature records,” said the WMO secretary-general, Petteri Taalas.

The WMO noted that 2016 was the warmest year on record because of “a ‘double whammy’ of a very powerful El Niño event and human-induced warming from greenhouse gases”.

However, it cautioned: “At this stage there is no indication of the strength or duration of El Niño.”

But the red lights are flashing. DM168/OBP

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R29.

Absa OBP

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