As South Africa continues to feel the effects of drought and the fall of the Rand, it’s maize importation figure has increasingly hiked.
Currently, the country’s spot price of white maize has reached a record high of R5,140 a ton on Monday morning trade. Grain prices have been said to be creeping up for the past year due to the drought ravaging SA in what has been both the hottest and driest summer in more than a century.
2014 ended with the price of the white maize at R2‚121 a tonne, but the price seems to have more than doubled since then reaching close to 120% during the course of 2015 and is already up more than 10% since the start of this year.
The current hike of grain prices has forced livestock farmers to slaughter early, resulting to the fall of meat prices in the short term. This is unlikely to last, however, the net result will be a shortage of red meat, which will send prices soaring again in the relatively near future.
The general Manager, Farmers’Union TAU, Bennie Van Zyl said the price of staple food at this level will have far-reaching repercussions for the country. “High prices do affect food security, though food will remain available.
“Of greater concern is the ripple effect farm failures will have on rural communities. When farmers go bankrupt, it has a degenerative socioeconomic effect. As it is, farmers are the backbone of the social structure in communities where government delivery has long ceased.
“Moreover, people will lose their jobs and flock to the cities, where there are no jobs. The result is yet more crime and a further erosion of investor confidence,
“It will become clear, in retrospect, that the government should have declared a national disaster. But it did not. Now we have to ask whether this lesson has been learnt.” he said.
Meanwhile, its Grain SA reports that South Africa has imported 38,306 tons of yellow maize from Brazil this week. Yellow maize which is normally used as animal feed in the country is now expensive due to the rand which is becoming weaker.
According to Grain SA, South Africa had already imported 67% of the total quantity of maize it needs to import this year. The 2015-16 imports stood at 516,997 tons, which was 67% of Grain SA’s predicted imports of 770,000 tons for this season.
A Grain SA economist Wandile Sihlobo said “The calculated parity prices for (the) December 2015 maize contract month were higher and that might, in (the) short term, add upward pressure on domestic maize price movements,” Other food prices are expected to rise as well in the coming months if the rand continues to get weaker and the drought persists.