Price of white maize falls with glut in SA’s export markets
By Colleen Goko - Jun 29th 2017, 08:54
SA could battle to offload some of its surplus white maize as major customers are also experiencing a production uptick.
The country’s maize oversupply has led to prices falling to their lowest levels since September 2014.
In its release on Wednesday, the government’s crop estimates committee said the size of the expected commercial maize crop was unchanged at 15.6-million tonnes.
Of that, 9.5-million tonnes would be white maize and the rest the yellow variety.
Industry expectations are for a 4.2-million tonne exportable surplus for both white and yellow maize.
About 2-million tonnes will be exported, while the rest of the stocks will carry over to the next marketing year.
Absa agricultural economist Conce Moraba said that the export market was limited as most of the continent had enough supply to serve country-specific needs.
So, maize prices would remain under pressure near export-parity price levels, said Moraba.
"Mozambique is expecting a bumper crop and early harvesting is well under way. Malawi’s new crop and carry-out is also expected to meet local demand," said Moraba.
"Zimbabwe is also expected to produce sufficient supplies for their local consumers."
SA would consider the Middle and Far East Asian countries as possible markets.
Earlier in June, Zimbabwe — which forecast output of the staple at 2.1-million tonnes in 2017, from 511,000 tonnes in 2016 — announced it would ban all grain imports to protect local farmers after producing enough to meet domestic demand.
Agbiz agricultural economist and head of agribusiness research Wandile Sihlobo said Zimbabwe was being ambitious and was likely to have to import towards the end of 2017.
"I think later on this year, Zimbabwe will import maize again. But exports in general are under pressure. Everyone in the region is sitting with a bit of excess," he said.
There was enough demand to support yellow maize prices locally and internationally.
"But even if we take the worst-case scenario, where the chicken industry undergoes a tough time due to the avian flu, there will still be demand in exports," he said. At the height of the drought in SA, the white maize price rocketed to R5,000, but it has retreated to about R1,762 a tonne.
The 7.8-million tonnes of white and yellow maize produced in total in 2016 had a value of about R39bn.
The 2017 crop has a value of about R29bn. The exports are expected to fetch about R6bn.
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