Johannesburg | Tuesday
A SHARP rise in maize prices has cut South African demand for maize meal, which could eventually force some millers out of business, the National Chamber of Milling (NCM) said on Monday.
Demand for the staple maize meal fell by at least four percent between May and July 2001 on the back of a 40% surge in maize prices and pushed consumer maize meal prices up by at least 20%.
”The milling industry does not have the financial ability to absorb the increase in the maize price.
During the 2000 financial period, the profit on turnover in the maize milling industry (before interest and tax) was a mere 0,64%,” the chamber said in a statement.
South Africa’s maize 2000/2001 maize output is seen at 7,225-million tons, down from 10,1-million tons in the previous year.
At current prices, consumption of maize meal is seen falling by eight percent or 312 000 tons until the next harvesting season starting May 2002, NCM executive director Jannie de Villiers said.
A recent study by the Bureau for Economic Research commissioned by the Chamber to study the impact of Aids on maize consumption showed consumption would have dived by 2011. Some 4,7-million South Africans are affected by Aids, with an estimated 1,700 more being infected daily out of the population of 43-million.
”The demand for maize will probably be 500 000 tons less per annum by 2011 if compared to a scenario without Aids,” the chamber said.
Aids deaths are seen having a significant impact on millers in the populous eastern KwaZulu-Natal province where sales are seen falling from 2004.
”We will have to withdraw some capacity, particularly in KwaZulu-Natal,” said de Villiers.- Reuters