SA white maize rises to 17-year high on supply concern

South African white maize rallied to the highest level in at least 17 years on concern that the nation, which is the continent’s biggest producer, will have insufficient supplies, according to BVG [a company of brokers specialising in trading agricultural futures and options on the South African Futures Exchange].

The contract for March delivery surged by the R80 limit, climbing 2.8% to R2893 a metric ton by the noon close on the South African Futures Exchange in Johannesburg. That’s the highest level since at least August 1996, when Bloomberg started compiling the data. Prices climbed 32% last year.

South Africa’s harvest of the white variety was the smallest since 2007 last year, dropping 20% from 2012, after the country’s main growing regions didn’t receive sufficient rain for crops to grow during the planting period, the Crop Estimates Committee said in November. Grain SA, the biggest representative of commercial farmers in the nation, on November 29 said white maize may surge as much as 27% if the drought-stricken North West province doesn’t get more rain to enable farmers to plant.

"South Africa will basically be running out of maize by end-March," Brink van Wyk, a trader at Pretoria-based BVG, said in an e-mailed response to questions. "Prices can easily go higher, depending on how difficult it is to secure stocks."

Planting season
The country’s farmers plant the crop in the summer months of October to December and reap their harvest from April to June. Meal made from white maize is one of the nation’s staple foods while the yellow variety is used as animal feed.

"Tightness in supply" is the main reason for the rise in prices, Andrew Fletcher, an independent trader in Kroonstad in the Free State province, said by phone. "We’re effectively going to an import parity price," he said, referring to the cost local customers would pay for buying the commodity outside the country and transporting it to the nation. Parity for maize from the US was R3 173 a ton on December 12, according to the South African Grain Information Service’s website.

The white-maize harvest declined to 5.5-million tons last year, the government’s Crop Estimates Committee said. The group releases its first forecast for 2014 output on February 27. The area farmers planted with yellow maize this season probably fell 4% to 1.55-million hectares from a year earlier, the committee said on October  24 – Bloomberg

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Paul Burkhardt
Paul Burkhardt works from Johannesburg. Bloomberg reporter covering oil/gas, renewables, mining and unions in South Africa and sub-Saharan region. Retweets not endorsements. Paul Burkhardt has over 1431 followers on Twitter.

Related stories

AG’s report reveals the municipalities where money goes to waste

Municipalities are in complete disarray, with many of them flagged by the auditor-general for deliberate lack of accountability and tolerance for transgressions by political and administrative leadership while billions are squandered.

No back to school for teachers just yet

Last week the basic education minister was adamant that teachers will return to school on May 25, but some provinces say not all Covid-19 measures are in place to prevent its spread

Lawfare hits North West ANC regions

A flurry of legal cases before the party’s regional and provincial conferences are central to Supra’s fightback

Can-do people achieve despite the odds

Our final freedom is the choice we make in our attitude to difficult circumstances — as the stories of 16 exceptional teachers show

Zuma-ists hope to ace provinces

Acolytes of the ex-president gear up take-back regions in Mpumalanga, KwaZulu-Natal and North West before the ANC mid-term meeting

Changes to mining Act need work

Proposed amendments to the legislation mandate meaningful consultation with communities but critics say there are loopholes

New education policy on gender violence released

Universities and other higher education institutions have to develop ways of preventing or dealing with rape and other damaging behaviour

Cambridge Food Jozini: Pandemic or not, the price-gouging continues

The Competition Commission has fined Cambridge Food Jozini for hiking the price of its maize meal during April

Sekhukhune’s five-year battle for water back in court

The residents of five villages are calling for the district municipal manager to be arrested

Vaccine trial results due in December

If successful, it will then have to be manufactured and distributed

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday