Maize import costs to hit consumers hard

CAPE TOWN - Drought-stricken South Africa will need to import millions of tons of maize and this will increase the cost of  basic foods by as much as 25 percent, government and representatives of the agricultural industry said.


Agriculture Minister Senzile Zokwana said  5 million to 6 million tons of of both white and yellow maize would be needed. Combined with the predicted needs of Zimbabwe, Lesotho, Namibia, Botswana and Swaziland, imports might be at 10.9 million tons, including commodities such as soya, wheat.

At an estimated R4,500 a ton, this could cost about R20-billion, Grain SA CEO Jannie De Villiers said.
The government has also announced it is reprioritising more than R300-million for drought-relief efforts and has asked the Treasury for additional funds.

The South African Weather Service has confirmed that last year was the country's driest on record. A data set of monthly average rainfall countrywide, dating back 112-years, shows that in 2015 the average rainfall was about a third less than the usual 608mm a year.

De Villiers said the country’s three main sources of yellow maize, used mostly as animal feed and  readily available across the world globally, were Argentina, Brazil and the Black Sea countries.
The availability of white maize, which is what South Africans eat, was much more problematic.

“White maize is not readily available in the world, but we are still talking to government to see what we can do in a situation like this to find some white maize, especially in Mexico and the US – this is basically the only white maize available,” said De Villiers. “The price is the issue here.”
De Villiers said there needed to be urgent movement on imports as South Africa was running low on white maize stocks.

“If we look at the current estimate of the crop, we’re going to run out of white maize by somewhere in September/October and this is why we’re going to have to start to look at imports earlier rather than later.”
The National Agricultural Marketing Council said food prices would be severely affected by the imports.

“As we speak, the indications are that if we have to import 5- to 6 million ton of maize at the price of R4,500 [per ton], the impact on prices on a normal basket [of foods] …would be in the region of 25 percent…, said CEO Ronald Ramabulana.