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SA may need to import 5 million tonnes of maize – Grain SA

Group says country will be lucky to produce five million tonnes this year.

JOHANNESBURG – South Africa may need to import as much as five million tonnes of maize this year, roughly half of its requirements, in the face of its worst drought in three decades, the largest producer group said on Wednesday.

The drought in the continent’s biggest maize producer has been exacerbated by an El Nino weather pattern and follows dry spells last year that reduced the crop by a third to 9.94 million tonnes, the lowest since 2007.

“We can now, with a lot of confidence, say we are in a disaster in the maize belt,” Jannie de Villiers, chief executive of Grain SA, told Reuters in a telephone interview.

“We will be lucky if we produce five million tonnes this year and then we will need to import five million tonnes. This is the sort of scenario that we are looking at.” 

That would raise practical problems of who can supply the required commodity and whether South Africa is able to handle such a large volume of imports.

South Africa’s central bank, which has been raising interest rates, has expressed concern about the impact of the drought and food price pressures on inflation in Africa’s most advanced economy.

Industry estimates at this stage remain fairly rough and previous predictions were for import needs ranging from 700 000 to 4 million tonnes. But the predictions have increased the longer the drought has gone on.

Practical Problems

The hardest-hit areas are in the northern Free State province in the western part of the maize belt, a key growing area. De Villiers said many farmers had not planted there yet, missing the last real opportunity.

“The insurance companies will not pay out if the crop has not been planted and germinated by the first of January,” he said. Maize in South Africa is generally planted early in the southern hemisphere summer around November.

The situation in eastern part of the maize belt in Mpumalanga province, which has had some rain, is not as bad but De Villiers said yields there would likely fall below average.

“How are we going to import five million tonnes? Because our port facilities cannot do that,” De Villiers said.

Such facilities would include grain elevators to move imports and storage sites, which risk being overwhelmed.

The chief executive of Transnet, South Africa’s state-run ports and rail company, told Reuters in December that the groundwork was being prepared to import as much as 4 million tonnes of maize.

De Villiers said the other problem was sourcing white maize, the staple crop that provides much of the caloric intake for South Africa’s lower-income households.

Outside of Africa, the only other significant producers of the white variety are Mexico and the United States. Yellow maize in South Africa is mostly used for animal feed.

According to the South African Grain Information Service, in the 2014/15 marketing season South Africa imported just 65 000 tonnes of yellow maize.

So far this season, which runs to the end of April, the country has imported 670 000 tonnes of yellow maize and 68 000 tonnes of white maize, the latter from Mexico and Zambia.

South African white maize prices doubled last year and the March White maize contract hit a record high of R4 901 ($311) a tonne on Tuesday on drought worries. 

It briefly hit a historic high of R4 952 a tonne on Wednesday on De Villiers’ comments before falling back to close 0.50% lower at R4 875 a tonne. ($1 = R15.7440)

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