The price of staple foods such as maize and wheat can’t be blamed for high levels of inflation, as prices paid to farmers have decreased year-on-year. So said Grain SA chairperson Neels Ferreira, commenting on the latest food-price monitor report by the National Agricultural Marketing Council (NAMC).
“The price of white maize on a year-on-year basis fell 13,8% from April 2008 to April 2009,” said Ferreira. “The wheat price fell by 34,8% and the price of white maize is markedly lower than two years ago.
“However, the price of 700g of brown bread increased from R5,75 in March 2008 to R7,21 (25, 39%) in March 2009 and 5kg of maize meal went up from R21,78 to R23,16 (6,33%). This raises the question, what would have happened to the consumer price of bread and maize meal if wheat and maize prices had increased?”
South Africa’s producer power
“South African maize producers supply southern Africa and other African countries with maize at about R1 050/t cheaper than imported maize. It would have cost South Africa about R4,55 billion more if the 4,4 million tons of white maize for local consumption were to be imported.”
According to Ferreira, South Africa exported about 1,9 million tons of white maize to 22 African countries during the 2008/09 marketing season. In excess of 526 000t went to Zimbabwe, 386 586t to Kenya, 282 397t to Mozambique and 572 385t to the Botswana, Lesotho, Namibia and Swaziland. This enabled these countries to provide their citizens with relatively cheap food. It also earned South Africa about R4 billion in foreign exchange.
“For the current marketing year from May 2009 to April 2010, local maize producers again produced a harvest exceeding domestic demand,” said Ferreira. “Profit margins for the present crop are under pressure because of high inputs and low prices. Total production costs exceed income by as much as R500/t.”
This might compromise producers’ ability and willingness to plant maize on the same scale in future, causing problems for future availability. – Annelie Coleman