SA will continue maize imports
Stock levels down by 18%
SOUTH AFRICA’S maize stock levels remain very tight, making it likely the country will have to continue importing the commodity.
A South African Grain Information Service (Sagis) report released yesterday revealed that maize stock levels were at 3.12 million tons at the end of December.
Wandile Sihlobo, the head of economic and agribusiness intelligence at Agbiz, said this meant that the country would continue to import maize to cover the shortfall.
“The 3.12 million tons figure is 20 percent lower year on year than the 2015 figure and 18 percent lower compared with November 2016.
“This means South Africa has very tight stock levels of maize and is likely to continue importing the commodity in the next season,” he said.
Of the total, 49 percent represents yellow maize and the remainder is white maize. Sihlobo added that maize consumption in the country dropped last month.
“Consumption dropped by 10 percent compared to December 2015. This can be attributed to the prolonged drought and consumers switching to other foods, such as rice,” he said.
Despite forecasts of rain, it was still too early to tell how much maize the country would need to import in the next season, he said.
“We are expecting rainfall across the eastern, central and northern parts of South Africa within the next eight days. This expected rainfall varies between 20mm and 70mm and could improve soil moisture and dam levels, which in turn will benefit summer crops,” he said.
Paul Makube, a senior agricultural economist at FNB, said the improved weather conditions would make it possible for the country to have a better harvesting season. “Sagis reported that maize plantation has increased to 2.63 million hectares,” he said.
Makube said South Africa would continue to import maize until at least the first harvest in about April or May.
“As much as the weather conditions improved during the course of the year, the country will still rely on imports to cover its maize shortfall,” he said.
The country is performing better in terms of wheat production. The report revealed that wheat stock levels were at 1.68 million tons last month.
Sihlobo said this was 12 percent higher than in November and 7 percent higher than December 2015.
Wheat production was boosted by the performance of the Free State and Western Cape.
Sihlobo said the country’s wheat production was at comfortable levels, but maize production was very tight.
Meanwhile, Trade and Industry Department spokesperson Sidwell Medupe said Minister Rob Davies had not gone to Britain to establish new trade agreements.
“All the trade agreements that we have with the EU also cover Britain. The agreements are still in place until Britain leaves the EU,” he said.
Medupe added that Britain’s impending exit from the EU did not have to disturb the trade relations between it and South Africa.
He said Davies went to the UK to engage with business people and investors and assure them that South Africa was still a country with which they could do business. “When Britain finally leaves the EU, the minister wants to ensure that trade between Britain and South Africa is not disturbed. “He met representatives from different industries, such as the wine industry, and some investors,” he said.
South African exporters have had preferential access to UK markets under two agreements entered into with the EU as a regional bloc. The Trade and Development Co-operation Agreement was implemented in 2000, but recently replaced by the SADC-EU Economic Partnership Agreement.
SOUTH Africa must defend its chicken farmers from an influx of imported dark meat from Europe or face the collapse of the local industry, Trade and Industry Minister Rob Davies said this week.
While domestic producers must become more competitive to ensure the industry’s sustainability, their efforts would be useless unless cheap imports were stemmed, Davies said on Tuesday.
Since tariffs were removed five years ago under a trade agreement between Europe and South Africa, imports of bone-in portions, such as legs and thighs, have tripled to more than 188 million kilograms last year, according to the South African Poultry Association.
“The competitiveness issues are there, we have to work around those with the industry,” Davies said.
“But they’re not going to be solved if we just allow an influx of spare parts from around the world to come in to take over the market.”
South African producers say they are being unfairly undercut by imported bone-in portions after tariffs on chicken from Europe were removed at the start of 2012. European consumers’ preference for chicken breasts means the continent’s producers have an abundance of legs, thighs and wings that they can sell cheaply in Africa.
“We definitely have distress, there’s no doubt about it,” Davies said.
After South Africa imposed a temporary 13.9 percent duty on European imports in December, EU Trade Commissioner Cecilia Malmstrom wrote to Davies saying that South Africa’s “structural problems” were more to blame for the local poultry industry’s problems than competition from Europe. – Bloomberg
While wheat harvests have improved from their low levels in the middle of last year’s drought, maize harvests are still expected fall well short of the country’s need, meaning that imports will continue for at least a few more months.
Cheap chicken imports from Europe are putting local producers under stress.