SA will con­tinue maize im­ports

Stock lev­els down by 18%

The Star Early Edition - - BUSINESS REPORT - Sandile Mchunu

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

PHOTO: LEON LESTRADE

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.

PHOTO: SIMPHIWE MBOKAZI

Cheap chicken im­ports from Europe are putting lo­cal pro­duc­ers un­der stress.

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