JOHANNESBURG – South Africa could start importing maize if stocks fall too low after unfavourable weather conditions reduced the expected harvest for the 2015 season, traders and an industry body said.
Severe drought and unrelenting heat in the maize belt of Africa’s biggest producer have raised concerns about the price of food and a possible shortage of the crop in coming months.
Last season’s harvest was the highest in 32 years while this season’s is expected to be the lowest in eight years.
“If there is a shortage of white maize we can probably source it from Zambia, but it will only be able to reach South Africa from August onwards,” Willem Voogt, manager of marketing and financial services at Grain SA.
“Given the current crop estimates, it is foreseen that we will have just enough white maize. But if the crop further deteriorates we could run short.”
According to industry data released last month, 2.495 million tonnes of white maize and 1.542 million tonnes of yellow maize were in stock at the end of January.
Although this is higher than the same time in 2014, Voogt said there was still a danger of a shortage.
Yellow maize is mainly used for animal feed in the poultry and pork industries while white maize is a staple for the poor majority and working class.
Total annual maize demand in South Africa is 10.1 million tonnes, said Voogt. For yellow maize, the demand is 5.7 million tonnes and for white it stands at 4.4 million tonnes.
Piet Fuare, a soft commodities trader at CJC Securities, said the rising prices of maize would affect inflation.
Another analyst said more yellow maize could be imported as there were limited supplies of white maize globally.
The most traded July white maize contract has climbed 30% this year mostly due to unfavourable weather conditions, peaking at R3,010 rand a tonne in February.
South Africa will likely harvest 9.66 million tonnes of maize this year, 32 percent less than 2014, the government’s Crop Estimates Committee said in February.