Looming maize shortage could increase prices in SA : Friday 3 January 2014

Looming maize shortage could increase prices in SA

Friday 3 January 2014 18:40

SABC

The price of maize will go up due to the shortage curerntly being experienced by the country

The price of maize will go up due to the shortage currently being experienced by the country. (SABC)

The new year is expected to be a tough year for consumers. Concerns that South Africa will not have sufficient supplies of both white and yellow maize have pushed up the price.

Economists say the limited availability is due to the drought seen last year in the North-West and the Free State. They say this will see consumers pay much more for basic food items like bread and samp.

South Africa is the continent's largest producer of maize. Prices of maize have already gone up by over R500 a ton in a month.

Andre Van der Vyver, market analyst at the University of Pretoria, says more yellow maize is currently being imported to help lessen the pressure. "White (maize) will ultimately depend on what will happen on the yellow maize. The yellow maize is in short supply. The shortage is about a 100 tonnes and the first shipment will be coming in February," says Van der Vyver.  

Pieter Van Schalkwyk, grain analyst at BVG, agrees with Van der Vyver adding: "The stock of yellow maize are tight as well. Traditionally it's easier to import yellow maize. We are looking to other countries like America to supply us with yellow maize."

The weaker rand is also pushing the costing of importing maize higher. The shortage of maize also means that South Africa will export less to other countries.

Ernest Jonovsky, head of ABSA's agricultural center of excellence says, "Anything that we are importing will have an impact on our current balance of payment, we are currently in a deficit when you look at our current account."

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