Johannesburg - White and yellow corn in South Africa, the continent’s biggest producer of the grains, surged after the Crop Estimates Committee said this year’s drought-hit harvest would be the smallest since 2007.
White corn for delivery in July climbed by the extended limit of R120 ($10), or 4.6 percent, to R2 715 a metric ton by 9.25am in Johannesburg. Yellow corn due in the same month advanced by the standard 80-rand limit to R2 456 a ton. The South African Futures Exchange caps the amount by which corn contracts can rise or fall by R80; should the limit be reached for two straight days, this is extended to R120.
Farmers may reap 9.67 million tons of corn this season, the committee said February 26. This compares with a 10.5 million-ton median of five estimates in a Bloomberg News survey. In 2014, the country produced 14.3 million tons. Crops in the Free State and North West provinces, which accounted for 64 percent of last year’s harvest, have been hurt by a drought this year, causing “irreversible” damage, said Grain SA, a farmers’ body.
“The crop estimates report was a lot lower than a lot of people were expecting,” Thys Grobbelaar, a grains analyst at Klerksdorp, South Africa-based Senwes Ltd, said by phone. “The chances are very good that we will have to import both white and yellow maize,” using the local term for corn.
White corn, used to make a staple food known as pap, has climbed 27 percent this year while the yellow type, mainly fed to animals, is up 13 percent.
“The weather can still have an impact on the coming harvest and uncertainty prevails, especially with regards to a further lower yield,” Grain SA Chief Executive Officer Jannie de Villiers said in an emailed statement on February 26. “One thing is sure and that is that we are not going to have an exportable surplus.”
The country will need to import about 1.65 million tons of yellow corn, Grain SA said. It last brought in this variety in April 2014, data on the South African Grain Information Service’s website showed.
Bloomberg