South African Finance Minister Trevor Manuel called on the maize industry to cut maize consumer prices in line with the plunge in maize futures prices quoted on the JSE Securities Exchange South Africa (JSE) during his Budget speech on Wednesday.
“Food price inflation has eased somewhat, but remains a cause for concern. We observe that the futures price of white maize has fallen from a peak of over 2 000 rand a ton to R940 currently. I trust that the determination of prices by producers, distributors and retailers we will see prompt corresponding downward adjustments, so that the consumer benefits fully from this favourable trend,” Manuel said.
The July white futures contract on the JSE has plunged from a high of R1 995 a ton to a closing level on Wednesday of R1 043 a ton. However, the main South Africa white maize milling companies, Tiger Brands, Premier and Sasko, have kept their prices unchanged and retailers too have not responded despite the spot price for maize halving in less than three months.
White maize is a key staple for South Africa’s poorest while yellow maize is a key input into animal feed for poultry and cattle for instance, so maize has a direct and significant impact on food pricing in South Africa.
National chamber of milling executive director Jannie de Villiers said that the latest produce price inflation numbers, released on Wednesday, showed a month-on-month decrease from December 2002 to January 2003 of 1,6% grain milled products.
“The writing is on the wall for lower maize meal consumer prices. However, there will be a lag between spot prices and consumer prices,” De Villiers said. – I-Net Bridge