Drought in South Africa pushes potato prices to the highest level ever

South Africa remains in the grip of its worst drought in decades. The South African Weather Service announced that 2015 was the driest year on record and it shows no sign of abating. Those records date back to 1904.

The hot and dry conditions are expected to continue for at least another month before autumn cooling can be expected to offer some relief.

The drought is being exacerbated by an exceptionally strong El Nino weather pattern. As is typically the case, this El Nino has brought drier conditions to southern Africa and wetter ones to east Africa.

The drought and hot conditions since September 2015 have a negative impact on yields in almost all the potato production regions in South Africa. Currently market prices are at the highest levels ever, while potato stock levels are at record low levels.
 

"The current drought in the country calls for cooperation from the private sector and farmers as well as planning for the future," says Rural Development and Land Reform Minister Gugile Nkwinti.

Farmers in almost every province have been scrambling to find water for their crops and livestock as the country's dam levels have dropped. In Limpopo alone some 51 600 livestock have been affected by the drought while over 2 000 cases of mortality have been reported.

South Africa witnessed a record potato harvest in 2015. More hectares were planted - although not much above the multi year trend, which is more or less flat.
 But far more important, high yields were realized - which caused strong downward pressure on market prices.

Production costs in South Africa are still showing a rising trend putting the profitability of potato production further under pressure. The sustainability of potato production is in jeopardy.
 In South Africa - where potatoes are harvested throughout the year - the drought and hot conditions since September last year, have a negative impact on yields in almost all the production regions. The resulting low stock levels are responsible for the sharp increase in market prices since November 2015.

During December 2015, 1 million 10kg bags less than November 2015 were sold on markets. During January 2016, 1.9 million bags less than during December 2015 were sold .
 For the 2016 marketing year information for 33 000 hectares is already available. Indications are that compared to 2015, hectares planted will only decrease slightly for 2016.