White maize prices will likely remain elevated for much of the first quarter of the year, writes Wandile Sihlobo. South African white maize prices crossed the R7 000 per tonne mark earlier on Thursday. Later, they retreated to under R7 000 per tonne. However, this fluctuation reflects broader trends in maize pricing, which I’ve discussed before.
White maize prices are expected to remain high for the first quarter of the year. Typically, favourable production estimates would soften prices. However, even with optimistic production forecasts expected from the Crop Estimates Committee at the end of February, prices might not significantly decline this year.
The underlying causes of the current price surge are multifaceted. South Africa’s maize harvest dropped by 23% to 12.7 million tonnes for the 2023-24 production season. This includes 6.0 million tonnes of white maize and 6.7 million tonnes of yellow maize. Although total production slightly exceeds domestic consumption of 11.7 million tonnes, the reduction places pressure on the market. Learn more about South Africa’s maize production trends.
Neighbouring countries in Southern Africa are facing severe maize shortages, leading to increased reliance on South African exports. For instance, Zambia lost half of its maize crop, while Zimbabwe lost nearly two-thirds of its maize crop. These regional deficits have heightened demand for South African maize. Read about regional agricultural challenges.
South Africa started the 2024-25 marketing year with a combined supply of over 7 million tonnes of white maize, thanks to a carryover stock of 1.3 million tonnes from the previous season. However, this cushion is rapidly depleting. Local white maize demand is estimated at 5.2 million tonnes, and white maize exports between May 2024 and early January 2025 surpassed 1 million tonnes. This tight supply explains the upward pressure on prices. For a detailed breakdown, visit the Southern African Grain Information Service (SAGIS).
The hope is that the 2024-25 maize harvest will ease the pressure on prices. However, late planting in some regions may delay deliveries. As a result, white maize prices could stay high for much of the first quarter. This, in turn, may lead to increased prices for grain-related food products.
I am not advocating for policy changes regarding exports but believe it’s essential to understand the factors driving these price dynamics. For insights into South African agricultural policies, see Agbiz.
