South Africa cut its 2015-16 cotton production forecast by about 5 percent, bringing the total drop in full-year output to an estimated 44 percent as farmers switch to more profitable corn crops in a drought period.
Farmers who irrigate their land “opted to plant maize, because of the good maize price, that is why there is such a big drop from last year,” Hennie Bruwer, chief executive officer of Pretoria-based Cotton South Africa, said by phone Wednesday. Maize is the local term for corn. The country’s agriculture sector contracted an annualized 14 percent in the final quarter of 2015 amid the worst drought in a century and the commodity price rout.
South Africa will probably produce 52,820 bales of cotton in the 2015-16 season while an estimated 900 bales will come from Swaziland, a tiny monarchy surrounded by South Africa. In February, Cotton SA projected output at 56,266 bales for this year.
The expectation for lower cotton output follows the trend in global production, which is on track to decline 15 percent this season due to falling yields, Cotton SA said in a statement, citing the International Cotton Advisory Committee, or ICAC.
“Going forward, we foresee that the crop plantings will increase depending on the weather,” Bruwer said.
Prices for white corn for delivery in July fell from a four-week high to 5,042 rand a metric ton on the South African Futures Exchange on Wednesday, paring its gain over the past year to 86 percent. Yellow corn fell 1 percent to 3,348 rand a ton, bringing its advance to 40 percent in the past 12 months.