The differentials for white and yellow maize will increase 16,5% for the road component and 18% for the rail component in the 2008/09 marketing season, according to Rod Gravelet-Blondin, senior general manager of the Agricultural Products Division.
This decision was taken after consultation with members of the road transport companies, according to Gravelet-Blondin. The actual increase per specific silo owner was calculated based on the percentage of their product moved via rail and road. Some silos have increased their rail rate by 22%, Gravelet-Blondin says. All location differential costs are based on the road transport cost for produce from the registered silo to Randfontein, which is the basis for the standardised futures contract to the registered silo, says Gravelet-Blondin. According to Dr Kobus Laubscher, general manager for Grain SA, while Grain SA acknowledge the increase, they certainly do not condone it.
“We understand that there are factors pushing transport costs up, but we don’t believe they justify this current price hike,” said Dr Laubscher. “This is but one of a series of price increases that affects grain farmers directly and, to us as farmers, seem unmanaged.” Laubscher mentions that service delivery levels from transport companies are questionable, and adds that better logistical planning and resource management should lessen the price increase pressures cited as reasons for the latest raise. – Wouter Kriel