The 10,87% increase in total maize plantings during the 2011/12 summer compared to the 2010/11 summer was mainly driven by expectations of higher prices this year due to large maize exports. So far, during the current marketing season running from 1 May 2011 to 30 April 2012, SA has exported 2,2 million tons of yellow and white maize.
Combined with anticipated continued exports for the remainder of the marketing season, this has seen local maize prices approaching attractive import parity levels. Both Grain SA and the Agricultural Business Chamber (ABC) said that, contrary to current opinion in some quarters, it’s not unusual for SA to export such large quantities of maize.
Grain SA pointed out that, in the 2005/06 marketing year, SA exported around 2,1 million tons, while the ABC explained that SA is a net exporter of maize roughly every nine out of 10 years with the exported quantities varying considerably from year to year.
The Crop Estimates Committee (CEC) recently reported that during the 2011/12 maize planting season, SA’s farmers planned to plant 1,6 million hectares to white maize and 1,4 million hectares to yellow maize.
For white maize this was 171 900ha or 12,12%, more than the 2010/11 season. For yellow maize it was 86 000ha or 9,01%, more. The CEC also said that the total white maize harvest for 2010/11 was 6,052 million tons and 4,4 million tons for yellow maize.
Dr John Purchase, CEO of the ABC, explained some of the reasons behind the current high maize exports. “The problem arose that the past season’s crop was considerably smaller than originally estimated, but that export contracts had been concluded at export parity prices on the expectation of a much larger crop, thus leading to the current shortfall.
“There will, in effect, still be a net carry-over stock into the next marketing season of close to a million tons, which is approximately 200 000t below the pipeline requirement and this, among other factors, has driven local prices higher.”
Grain SA economist Wessel Lemmer said it’s still too early to forecast maize prices for the 2012/13 marketing season.
Prices between old and new season crops differ greatly due to the current tight stock levels, he explained, adding that “exports will, to an extent, determine prices for the new season.”
Grain SA said that accurate information on future maize exports isn’t publicly available, making it difficult to tell if SA’s own maize needs will be met without resorting to imports.
However, projections based on monthly supply and demand show that SA will need to import 350 000t of yellow maize and 85 000t of white maize by the end of April, said Grain SA.