Recovery from the drought in the coming planting season, along with higher crop prices, bodes well for fertilizer sales. Last year’s rainfall averaged 403mm, compared to 544mm in previous years.
Poor rainfall had seen the hectares of summer crops planted cut 22% from 4.1-million hectares in 2014 to 3.2-million hectares last year, the Fertilizer Association of Southern Africa said in its annual report. This, together with regional food-production shortage, has driven Rand prices of maize to record highs.
White maize at R4,710 per tonne is about R1,600 above the theoretical import parity price. Yellow maize at about R1,084 per tonne is trading at import parity. These prices reflect a 124% increase for white maize and 62% for yellow since January last year. White maize is trading at more than the wheat price of R4,540 tonne.
Higher prices will encourage farmers to be optimistic and bodes well for the fertilizer industry, the association’s chairman and Omnia Fertilizers MD Adriaan de Lange says in the annual report.
The association proposed 20 corrections to a Fertilizer Bill making its way through the legislature. Proposed changes include regulations related to municipal compost, sewage sludge, and farm manure destined for the garden and household market.
One of the main deviations from the original proposals was the need to continue with the registration of final fertilizer products, the association said.