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


The death of Enoch Mpianzi at Parktown Boys is a...

Ignore the language used in brochures and on open days and be vigilant about the details

Study unpacks the ‘hidden racism’ at Stellenbosch

Students say they feel unseen and unheard at the university because of their skin colour

Failure to investigate TRC cases during the Mandela era delayed...

Counsel for late trade unionist Neil Aggett’s family decries the slow pace of instituting an inquest into his death

Courts to guide land expropriation

Two bits of law need to be approved before a court can decide if land owners will be compensated

Press Releases

MTN unveils TikTok bundles

Customised MTN TikTok data bundles are available to all prepaid customers on *136*2#.

Marketers need to reinvent themselves

Marketing is an exciting discipline, offering the perfect fit for individuals who are equally interested in business, human dynamics and strategic thinking. But the...

Upskill yourself to land your dream job in 2020

If you received admission to an IIE Higher Certificate qualification, once you have graduated, you can articulate to an IIE Diploma and then IIE Bachelor's degree at IIE Rosebank College.

South Africans unsure of what to expect in 2020

Almost half (49%) of South Africans, 15 years and older, agree or strongly agree that they view 2020 with optimism.

KZN teacher educators jet off to Columbia University

A group of academics were selected as participants of the programme focused on PhD completion, mobility, supervision capacity development and the generation of high-impact research.

New-style star accretion bursts dazzle astronomers

Associate Professor James O Chibueze and Dr SP van den Heever are part of an international team of astronomers studying the G358-MM1 high-mass protostar.

2020 risk outlook: Use GRC to build resilience

GRC activities can be used profitably to develop an integrated risk picture and response, says ContinuitySA.

MTN voted best mobile network

An independent report found MTN to be the best mobile network in SA in the fourth quarter of 2019.