SA white maize extends record highComment on this story
Johannesburg - South African white corn rose for a fifth day to extend a record price on speculation there are inadequate supplies of the variety that’s a staple food and as the rand fell to a more than five-year low against the dollar.
The nation’s harvest of the white variety was the smallest since 2007 last year, dropping 20 percent from 2012 because of insufficient rains, the Crop Estimates Committee said in November.
A lack of water in key growing regions in this planting period may affect yields in the current season and raise prices, according to Grain SA, which represents commercial farmers.
Corn is also known as maize in South Africa, which is the continent’s biggest producer of the grain.
The country last imported white corn in April 2012, according to data from the South African Grain Information Service.
The depreciation of the rand will boost the cost of grain shipments to the nation.
“We must look at the rand; it’s weakening, which is making the product more expensive,” Thys Grobbelaar, an analyst at Klerksdorp, South Africa-based Senwes Ltd., said by phone.
The March-delivery contract for white corn climbed 2.2 percent to close at 2,983.80 rand ($279) a metric ton on the South African Futures Exchange in Johannesburg.
It’s the highest level since trading started in 1996.
The yellow variety, used mainly as animal feed, for delivery in the same month increased 1.3 percent to 2,793 rand a ton.
The rand, which lost 19 percent against the dollar last year, declined to 10.76 on January 3, the weakest level since November 21, 2008.
It added 0.6 percent to 10.6994 today.
“It is very difficult to import white maize, which is a staple food in southern Africa, so millers of white maize are willing to pay very high prices to secure stocks as consumers of maize meal have a very strong preference for white maize meal as opposed to yellow,” Brink van Wyk, a trader at Pretoria-based BVG (Pty) Ltd., said in a January 4 e-mailed response to questions. - Bloomberg News