The price of maize has slumped in expectation of a bumper crop and the biggest in over three decades.
White maize in South Africa, the continent’s largest producer of the grain, declined to a two-year low as the harvest of what may be the biggest crop in 33 years starts.
White maize slumped 2.9% to R1 976.20 a metric tonne by the midday close on the South African Futures Exchange, the lowest since May 7 2012. The yellow type dropped 2.2% to R2 094 a tonne.
Local farmers may harvest 13.03-million tonnes of maize this season, 11% more than in 2013, the Crop Estimates Committee said on April 24. That would make it the biggest crop since 1981, according to the group. Maize meal made out of the white variety is a staple food known locally as pap, while the yellow type is mainly used as animal feed.
“The size of this big crop that farmers are now starting to harvest is weighing more and more on the market,” Brink van Wyk, a trader at Pretoria-based BVG, said in an emailed response to questions. “So the weakness is not over and we should see prices going even lower over time.”
Stocks of both white and yellow maize may rise 16% to 1.27-million tonnes by the close of the marketing year that ends in April 2015, the Grain and Oilseeds Supply and Demand Estimates Committee said on April 25.
Wheat rose 1% to R4 056 a tonne, the highest since March 26. – Bloomberg