South Africa Exporting Corn Risks Depleting
Domestic Supplies
A government-backed plan to export a record corn
surplus may leave South African silos drained of the country’s staple food by
the end of April.
The price of white corn, used to make the corn meal
eaten by many South Africans, has risen
to a record in Johannesburg and the nation is importing the yellow variety of
the grain for the first time in two years. Millers, chicken producers and
cattle breeders are facing a surge in costs and food inflation may quicken to
as much as 15 percent from 11.1 percent
in November, said Gina Schoeman, an economist at Absa
Group Ltd.
The mismanagement that is pushing up food prices
and consumer inflation comes as South Africa grapples with the gap between rich
and poor. It is the most unequal of 67
countries assessed by the World Bank and one-fourth of South Africans are jobless.
Facing a record surplus two years ago after the
biggest crop in almost three decades, farm bodies such as Grain SA, which
represents 7,000 commercial growers, pushed the government into helping find
new corn markets ranging from South
Korea to Italy
and Mexico.
Corn is also known as maize.
South
Africa will need
to import 700,000 tons of corn between January and July, Jannie
de Villiers, the chief executive officer of Grain SA, said in a phone
interview. The crop will mostly be delivered to silos in June and July,
according to Senwes.
South Africa has exported at least 2.14 million
metric tons of corn in the marketing year that began May 1, compared with 2.07
million tons in all of last season, according to the South African Grain
Information Service, a Pretoria-based industry body known as Sagis.
Retail prices for a 5-kilogram (11-pound) bag of
corn meal in urban areas rose 32 percent in the year
to October to an average of 27.87 rand, according to the National Agricultural
Marketing Council.
Five corn-meal brands sold for an average of 31.77
rand per 5-kilogram bag on 16 January at a shop in Sandton,
Johannesburg owned by Shoprite Holdings Ltd. (SHP) About 39 percent of
South African households live on less than $52 a month, according to government
data.
The price increases are a result of demand and
supply forces in a free market, Simphiwe Ngqangweni, acting director general of the Department of
Agriculture, said on Jan. 12 in an e-mailed response to questions.
No Approval
While South Africa has traditionally bought corn fromArgentina
in times of need, that country now produces much of its grain using a genetically modified seed variety that hasn’t yet been approved by the African nation for import, Astral Foods’ Schutte said.