Advertise with fastmoving.co.za
 
 

SA could battle to offload some of its surplus white maize as major customers are also experiencing a production uptick.
SA could battle to offload some of its surplus white maize as major customers are also experiencing a production uptick.

Price of white maize falls with glut in SA’s export markets

ECONOMIC NEWS

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.

© BusinessLIVE MMXVII 

Related News

Plans to reshape the clothing industry
18/06/2019 - 10:19
A master plan submitted to the Department of Trade and Industry (dti) aims to improve the country's ailing clothing and textile industry.

Zimbabwe's farmers smell the tea and coffee
14/06/2019 - 09:50
Farmers in Zimbabwe’s Eastern Highlands are smelling the tea and coffee.

Trade body will have a bone to pick in poultry tarrif case
14/06/2019 - 09:30
Those with intimate knowledge of the tariff application say that ITAC's position is akin to a zero-sum game, where they may have to choose between exposing local poultry producers to cheap imports they cannot compete with, or raising consumer prices for poultry to impossibly high levels.

SA's first citrus shipment arrives in China
13/06/2019 - 15:39
The historic shipment of 5 200 tons of citrus in a breakbulk vessel has arrived at Shanghai Port in the People’s Republic of China.

Increase in sales reflect stronger second quarter
13/06/2019 - 10:41
Data from Statistics South Africa (StatsSA) showed that retail sales in April increased 2.4percent year-on-year - the strongest gain in retail trade in six months, providing further evidence that the economy began the second quarter on a firmer footing following the first quarter’s 3.2percent plunge.