Worst drought in 104 years forces SA hand

SOUTH Africa approved imports of genetically modified (GM) maize from the US for the first time after its worst drought since records began 104 years ago cut local output. Local white maize prices fell.

The nation would allow both white and yellow GM maize from the US to be brought in, said Dirk Kok, a spokesman for the secretariat of the South African Cereals and Oilseeds and Trade Association. A call to the government’s Department of Agriculture, Forestry and Fisheries media department wasn’t answered.

“The door is open to imports from the US,” said Kok, whose organisation represents grain and oilseed traders. Local “prices will come down”, he said.

The country became a net importer of maize in the season that ended in April for the first time since 2008 after the drought slashed the total harvest by about a quarter to 7.97 million tons, the smallest in a decade. While rains in the current season are improving prospects for the next crop,

Tons of yellow GM maize that might be imported from the US by April

concerns about supply of the white variety persist because this type is only widely produced in southern Africa and Mexico.

White maize surged to a record R5 296 a ton in January and has fallen 28 percent since on the SA Futures Exchange. The yellow type, used for animal feed, reached a high of R3 915 a ton in June and has dropped 20 percent.

White maize for March delivery fell as much as 2.6 percent to R3 755 a ton and traded 1.9 percent down as of 9.26am. Yellow maize fell as much as 0.7 percent and traded 0.2 percent up at R3 152 a ton.

The decision “is critical”, said Wandile Sihlobo, the head of economic and agribusiness intelligence at the Agricultural Business Chamber. “We are going to see a stronger correlation between the yellow-maize price and the US price. The reaction of the South African farmers is going to be interesting.”

By the end of April, South Africa might import 300 000 tons of GM white maize from the US and 500 000 tons of yellow maize, he said.

South Africa imported 555 241 tons of white maize between May 1 and November 25, or 65 percent of the forecast amount for the season ending April 30, according to the Agricultural Business Chamber. Almost all of that came from Mexico.