Mexican maize quality queried
JSE committee raises issue
ONE OF South Africa’s biggest grain suppliers, Mexico, has seen its produce put under the microscope following reports that its white maize is of low quality.
The concerns were raised by the advisory committee to the JSE which runs the country’s agricultural derivatives market.
However, Paul Makube, a senior agricultural economist at FNB, said SA authorities would have blocked the consignment if it failed to meet the required specifications.
“When you enter into a contract with a supplier, there are certain conditions you must meet before the contract becomes binding on both parties. In this instance I suspect Mexico’s white maize meets all the specifications because if it didn’t it could lead to a cancellation of the contract,” Makube said.
Drought recovery
The devastating drought, the worst in more than 30 years, has forced South Africa to increase its maize imports during the 2016/17 season.
In the marketing year that began on May 1, South Africa imported 516 935 tons of white maize with 97 percent of that coming from Mexico.
The white variety of the grain is used as a staple food in the country while yellow corn is mainly used to feed animals.
The country’s maize imports were expected to reach 1.1 million tons of white maize for this marketing season.
Makube said the millers had not complained about Mexico.
“It might be a question of one or two consignments but not on a large scale that would raise an alarm. If there was a problem, the white maize from that country would have been stopped and the price of maize would go up again. So far we are seeing the price of maize dropping instead of going up,” he said.
Grain SA said it did not import white maize but it could confirm that from their experience South African white maize was of better quality than Mexico’s.
“Grain SA does not import any grain. I think it will be better to contact the traders. However, what we have seen though is that the South African quality of white maize is far more superior to that of Mexico,” Grain SA said.
Agricultural Business Chamber (Agbiz) chief executive John Purchase said SA farmers were coping well with drought and were accessing more support from the bank.
It might be a question of one or two consignments but not on a large scale.
“The so-called maize triangle, the country’s main maize-production region is still experiencing dry areas but the farmers are coping well,” Purchase said.
He said the country’s agricultural trade balance fell as much as 22 percent and 11 percent in the first quarter and second quarter respectively.
Meanwhile, the recent Producer Price Index data shows that food products inflation fell to 12.7 percent year on year in last month from 13.1 percent year on year in September.
Agbiz senior agricultural economist Wandile Sihlobo said this meant that consumer inflation for food was likely to decelerate over the coming months.
“We believe that food products inflation could remain elevated this year, but should decelerate in 2017 due to expected recovery in agricultural crop production. Moreover, dairy products inflation could also slow towards the end of this year when milk production recovers on the back of improving grazing fields.”