White maize is already trading at a premium. Photograph:Phando Jikelo/Independent Newspapers
The maize prices continued to surge, with white maize trading at just over R6 300 per ton while yellow maize traded at over R5 000 per ton.
Last month, the Pretoria office of the US Department of Agriculture (USDA) published a report on South Africa's maize market highlighting the difficulty caused by the recent mid-summer drought, which led to a 23% decline in maize production to 12.72 million ton
. South Africa was not alone in this experience; Zimbabwe lost roughly 60% of its maize harvest, while Zambia lost half of its crop. Malawi, Mozambique, and others also experienced significant crop losses. This means the Southern Africa region will require maize imports to meet its annual needs.
The USDA report said South Africa could import approximately 800 000 metric tons of corn in marketing year (May 2024 – April 2025). This statement raised concerns about South Africa's maize supplies.
Wandile Sihlobo, the chief economist at the Agricultural Business Chamber (Agbiz), said these price increases partly reflected the tight maize supplies, weaker domestic currency and stronger regional demand.
“We continue to believe South Africa has no problem like other Southern African countries. South Africa's maize harvest of 12.72 million tons is well above the annual needs of 11.8 million. Moreover, South Africa had large stocks of over two million tons from the last season, further boosting the supplies this year. This ultimately meant that while the supplies were tight, South Africa continued to export maize to the Southern African region to stabilize food supplies,” Sihlobo said.
The agribusiness organisation said overall, these challenges are for the near term. Agbiz remains optimistic about the new season as farmers continue to till the land across South Africa, and the weather prospects are encouraging.
“We hope the broader Southern Africa region plants its usual maize area. Indeed, the La Niña rains are delayed by roughly a month, but the forecasts from various weather organizations remain active, promising a recovery.”
John Hudson, the head of agriculture at Nedbank Commercial Banking, said white maize was already trading at a premium and the latest news has resulted in the price escalating further. He said their information suggests that South Africa has adequate white maize stocks to last through to the next season.
“In the short-term the increase in the white maize price may well filter through to the already cash-strapped consumer however any increase is expected to be marginal, and we don't expect any steep increases in white maize related food products. The white maize price has been elevated for some time and, with adequate stocks in place to take us through to next season, we are hopeful that any further increases in food prices will be muted,” Hudson said.
Nkhensani Mashimbyi, an agricultural economist at Absa AgriBusiness, said looking forward, maize prices are expected to remain robust for the remainder of the year and only expected to ease in the second quarter of next year. “The trend observed in vegetable categories is that demand is usually higher in the fourth quarter of the year due to the holiday season. This can drive prices to be slightly higher. Due to base effects, we expect food inflation to conclude slightly lower at the end of the year.”
The National Agricultural Marketing Council (Namc) said white maize production in South Africa plays a critical role in ensuring food security and fostering economic growth through generating foreign currency.
It said while the 2024/2025 season has highlighted vulnerabilities in the agricultural sector it also underscored the importance of resilience-building measures, both climatic and socio economic such as expansion of VAT zero rated foodstuffs.
“Prospects are likely for the SAFEX white maize contracts to trade at relatively lower prices in the next season in comparison to the prevailing prices this season. Available data indicates that the market is likely to rebalance without policy interventions,” Namc said.
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