Food may cost more as maize shortage looms

2011-11-17 00:00

SOUTH Africa is expected to run out of maize by as early as next month, which will push up prices of products affected by the cost of maize.

Grain SA chief executive Jannie de Villiers said his members face a dilemma — whether to stop exporting maize or import it when it runs out. He said that if maize has to be imported consumers can expect to pay more not only for maize, but also for dairy and poultry products.

Ironically, the shortage is the result of successful initiatives that Grain SA implemented with the Agriculture Forestry and Fisheries Department to export maize. Last year the industry was under extreme pressure as it had a large surplus of maize that was forcing prices down.

“Last year we were sitting on a surplus of two million tons of maize. We initiated the programme to export it to other parts of the world and that project worked. I am now afraid that it worked too well and now we are facing a shortage.”

De Villiers said the decision whether to stop or continue exporting will be determined by market factors.

“The markets work on a first come, first served principle. If the local buyers are not buying and another country like Mexico says. ‘We want that much maize’, we will have to sell it to them and the local buyers will have to import.”

He said some buyers in the country are already feeling the pinch and have started importing.

“I know for a fact that there are two ships of yellow maize coming from Europe that are heading to the Western Cape.”

De Villiers said the situation is ideal for farmers.

“At the beginning we did not have good prices as there was a surplus and now the prices will most likely go up and the farmers will get good prices until the next season.

“This is not ideal for the customers who purchase products affected by maize prices.”

He stressed that the situation is temporary.

“Provided that the climate is good we will be planting and harvesting by June next year. But if not, he added, “we will be in serious trouble as that will mean that we have to import maize”.

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