SA farmers see depressed maize prices in 2011

South Africa’s maize prices, which have largely been depressed this year, will remain under pressure in 2011 unless the country secures new export markets and the rand weakens, an industry official said.

Kobus Laubscher, chief executive officer of farmers’ group Grain SA, told Reuters in an interview on Tuesday the South African grain market is out of balance as supply surpasses demand, weighing on prices.

South Africa, the continent’s largest maize producer, harvested 12,815-million tonnes of the grain in the 2009/10 season, making it the country’s biggest crop in three decades.

South Africa’s annual maize consumption is between eight and nine million tonnes, leaving it with a surplus of about four million tonnes. The government has said it is still looking for additional export markets for the surplus to cushion the fall in prices.

“We have to be more aggressive in terms of exports in the new year, we have to find new markets. If we can not utilise the export markets, the local market will remain under strain,” Laubscher said.

He added: “Unless the rand weakens, we will not see significant price increases. The strong rand meant that our prices remained low.”

A strong rand makes South Africa products expensive for foreign buyers. The currency has strengthened 25% since the start of 2009.

South Africa’s benchmark December white maize contract has dropped 20% this year, with yellow maize for delivery in the same month falling 11%.

Limited exports markets
South Africa had to look for new export markets outside Africa this year after some of its traditional markets within the continent recorded maize surpluses.

South Africa has this year exported most of its yellow maize variety to South Korea and Kuwait. Other buyers include neighbours Mozambique, Lesotho, Namibia, Botswana and Swaziland.

“We have to open new markets, may be China, Japan, and the Middle East, but it all depends on demand,” Laubscher said.

South Africa exported 1,8-million tonnes of maize in the May 2009-April 2010 marketing season. The exports in the 2010/11 marketing season stood at 891 000 tonnes at the end of October.

The Department of Agriculture has since applied to the competition authority for an exemption to allow farmers to reserve the surplus grain for exports. The current law does not allow for the establishment of an export pool for the grain.

The agriculture minister has also said South Africa must review its biofuels policy to include maize to allow farmers to use their surplus crop for energy production.

The government unveiled blending ratios for biofuels three years ago but said maize could not be used to make biofuels to ensure food security and keep a lid on high prices. – Reuters

PW Botha wagged his finger and banned us in 1988 but we stood firm. We built a reputation for fearless journalism, then, and now. Through these last 35 years, the Mail & Guardian has always been on the right side of history.

These days, we are on the trail of the merry band of corporates and politicians robbing South Africa of its own potential.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Advertisting

Test backlog skews SA’s corona stats

With thousands of samples still waiting to be processed, labs are racing to ramp up testing to help the government gain a better idea of how prevalent Covid-19 really is

M&G’s latest Covid-19 projections

Covid-19 numbers are prompting disaster declarations and dramatic action across South Africa this week. All steps should be directed by numbers

Press Releases

The online value of executive education in a Covid-19 world

Executive education courses further develop the skills of leaders in the workplace

Sisa Ntshona urges everyone to stay home, and consider travelling later

Sisa Ntshona has urged everyone to limit their movements in line with government’s request

SAB Zenzele’s special AGM postponed until further notice

An arrangement has been announced for shareholders and retailers to receive a 77.5% cash payout

20th Edition of the National Teaching Awards

Teachers are seldom recognised but they are indispensable to the country's education system

Awards affirm the vital work that teachers do

Government is committed to empowering South Africa’s teachers with skills, knowledge and techniques for a changing world

SAB Zenzele special AGM rescheduled to March 25 2020

New voting arrangements are being made to safeguard the health of shareholders

Dimension Data launches Saturday School in PE

The Gauteng Saturday School has produced a number of success stories