MONDAY, 1.30AM:
FOR months now the South African Grain Information Services (Sagis) and the National Maize Producers Organisation (Nampo) have been releasing conflicting information about the size and pricing of South Africa’s maize crop, information on which the South African Futures Exchange’s agricultural division is basing its maize futures trade. This continual haggling begs the question: Do these authorities actually have any guess at where the maize harvest stands?
One thing is clear, the price of maize futures for July has fallen by between 40% to 45% to around R544 a ton for yellow, and R610 a ton for white, indicating a surplus in the market. The grain information service, which supplies official information on grain crops in the free market, recently indicated that this year’s white maize crop is likely to be 12% larger than initially expected while the yellow maize harvest should be 17% larger.
Nampo has dogmatically maintained its position that the crop would be smaller, pushing the price of grain higher. This weekend, however, Nampo said it would have “no choice” but to accept the grain information services’ figures in the face of depressed maize prices.
In December the price of maize futures was elevated to R1000 a ton. The problem, according to manager of the SAFEX agricultural division Chris Sturgess, was that there was no indication of carryover stock in South Africa. Responding to this dearth of information, a Sagis report — based on a survey of what tonnage farmers had left in their silos — released mid-May, placed the carryover in the market at over 2,6-million tons.
This unexpectedly large surplus had a huge impact on the futures market, expecting a maize deficit sparked by an El-Nino-induced drought, sparking a R30 fall in maize futures from R1000 a ton, Sturgess said.
Sparked by the continually conflicting maize statistics released by Nampo and Sagis, questions are now beginning to arise as to the accuracy of the information supplied about South Africa’s maize harvest. Industry sources have questioned how representative the carryover figure is, with one source on the SAFEX indicating that the breakdown of the figure is entirely unclear. Questions involving the percentage of the carryover that is imported maize, what amount is on export order, and what portion of the grain had been sold at the time of the survey, remain unanswered, he said.
Despite these nagging questions, Nampo chairman Japie Grobler conceded on the weekend: “When [Sagis’] carryover stock figures are added to the latest official crop estimates, it is clear that the domestic market is sitting with large surpluses.”