Maize exports: Shortfall looms

Sharp increases in maize exports are good news for the South African maize industry.

Sharp increases in maize exports are good news for the South African maize industry, according to John Rankin, Grain SA exco member and maize producer from Lichtenburg.

Increased exports are projected to cause a shortage, “which means we won’t be called on to curb maize production for fear of surpluses pushing maize prices down,” said Rankin. “Increased exports signify the increased profitability and sustainability of maize production. The industry was economically bogged down in past years because of surplus production and a lack of export opportunities.”

Rankin said that although the current white maize price of nearly R2 500/t is relatively good, the Safex contract price of R1 960/t for delivery in July 2012 is a cause for concern. “With input costs of R5 000/ha to R6 000/ha we need higher prices than that. We need an ongoing and sustainable maize export market to restore the economic viability of the South African maize production industry.”

White maize exports for 1 May 2011 to 30 April 2012 are projected at 1,28 million tons, and yellow maize exports at 720 000t, said Grain SA agricultural economist Barret Schoeman. “In the past we exported mainly to Africa, but these countries have increasingly become self sufficient, reducing export opportunities for SA maize.

“Poor international prices also limited our deep sea export opportunities, but recent increases in international grain prices have made deep sea exports a profitable option – thus the increase in exports to countries such as Korea and Mexico.”
Of the 1,08 million tons of white maize exported since 1 May, some 730 158t went to Mexico. Of the 720 000t of yellow maize earmarked for export, 652 891 has been exported so far, with 302 259t going to Korea.

“Provision is made for a three month pipeline supply (available supply) of 1,18 million tons for white and yellow maize, based on local consumption,” said Schoeman. “If this is deducted from the projected end supply of 977 000t at the end of April 2012, we’re looking at a shortage of over 200 000t at the end of April 2012, the first shortage in five years.”

Boikanyo Mokgatle, chief executive of the National Chamber of Milling, warned that a maize shortage will raise food prices. “Maize meal is a staple food and higher prices might affect food security in terms of affordability.” – Annelie Coleman

Caption:
Increased exports signify the increased profitability and sustainability of maize production, said Grain SA’s John Rankin.
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