A "super" El Niño event is expected to hit South Africa, potentially leading to drought and poor maize harvests. Maize is a staple crop in many African countries, and its price is influenced by global market trends. Researchers Anmar Pretorius and Mariëtte Geyser analyzed maize prices in South Africa and the US from 1997 to 2024, finding that local prices tend to follow US prices but with more volatility during El Niño and La Niña events.
El Niño events, caused by warmer Pacific Ocean sea temperatures, typically bring below-average rainfall to southern Africa, increasing the risk of drought. This can lead to poor maize harvests, forcing countries to import more maize and driving up prices. South Africa's maize prices are influenced by global market trends, with prices on the Johannesburg Stock Exchange often following those on the Chicago Mercantile Exchange.
The researchers found that during El Niño events, South African maize prices tend to deviate from US prices due to local supply shocks. In contrast, during La Niña events, which bring favourable farming conditions, local prices remain linked to US prices. The study analyzed six La Niña episodes and three El Niño episodes, finding distinct patterns in maize price movements.
The current "super" El Niño event is expected to peak towards the end of 2026 and last through at least February 2027. Researchers warn that this could lead to significant maize price increases in South Africa, particularly if the country needs to import maize. The country's maize stocks are currently higher than during previous El Niño events, but prices could still rise sharply if supplies run short.
South Africa produces two types of maize: white maize for human consumption and yellow maize for animal feed. In good years, the country exports maize to other African countries and global markets. However, in bad years, it must import maize at international prices, which can be costly. The El Niño event can also influence prices before any shortage occurs, as traders anticipate droughts and poor harvests.
To mitigate the impact of the Super El Niño, researchers recommend strengthening early warning systems to provide reliable climate and crop information to farmers, traders, and food processors. This can help markets adjust gradually to potential shortages, rather than reacting suddenly. Producers and agribusinesses should focus on risk management, including maintaining grain stocks and investing in drought-resilient production practices.
The authors emphasize that managing weather risk will become increasingly important as climate swings become more frequent. By understanding the patterns of maize price movements during El Niño and La Niña events, policymakers and stakeholders can develop strategies to minimize the impact of droughts and maize shortages on food prices and availability.
Key points
- Super El Niño event expected to impact South Africa's maize prices
- Local maize prices tend to follow US prices but with more volatility during El Niño and La Niña events
- Strengthening early warning systems and risk management can help mitigate the impact of droughts and maize shortages
