Cosatu urges regulator to probe maize pricing
TRADE union federation Cosatu has called for the Competition Commission to investigate the pricing of maize after accusing traders of using the devastating drought to manipulate prize increases.
Cosatu Western Cape secretary Tony Ehrenreich said there were no reasons to justify hefty price hikes as maize that was currently being traded fell within the amount that was available in South Africa in spite of the drought.
He said the government should be involved in maize pricing to protect food security in South Africa.
“We also want a comprehensive investigation done into the demand and supply of maize in South Africa, in light of the drought,” Ehrenreich said.
“We believe the government should intervene into the supply and pricing of maize given its central role in food security and hunger alleviation.”
The SA Futures Exchange (Safex), which is part of the JSE, and the SA Cereal and Oilseeds Trade Association, which represents traders in South Africa and the southern African region, were not immediately available for comment.
But Ehrenreich said Cosatu wanted maize trading to be made public so that the pricing could be monitored to determine who was driving price increases through purchases.
Ehrenreich said that the commission should investigate the pricing model used for maize and the prices on the Safex and the JSE as the cost and supply of maize was different to the figures that were being presented.
“It would seem that traders are manipulating the price of maize, where it is being bought and sold,” he said.
“This has a huge impact on poor communities who are dependent on maize as a basic food item. This increase has a knock-on effect on other prices as it is an important input into meat production etc.”
Cosatu’s call comes amid rising prices with claims that the price of maize, which is a staple food for most people in the region, has doubled in the past year as the worst drought in more than two decades ravages through the region.
Yesterday, the price of white maize futures on Safex rose 1.84 percent to close at R5 200 a ton, after reaching a record high of R5 203 a ton, while yellow maize futures broke above R4 000 a ton for the first time and reached a record high of R4 025 a ton before closing up 1.39 percent at R4 000 a ton.
On Monday, the white maize futures broke above R5 000 a ton for the first time.
This week the World Food Programme (WFP), a UN humanitarian organisation that is focused on fighting hunger, said the drought would leave more than 14 million people hungry in the region as dry spells had led to a poor harvest last year.
WFP executive director Ertharin Cousin said with little or no rain falling in many areas and the window for the planting of cereals already closed in some countries, the outlook was alarming.
“I’m particularly concerned that smallholders won’t be able to harvest enough crops to feed their own families through the year, let alone to sell what little they can in order to cover school fees and other household needs,” Cousin said.
1.84% Increase in the price of white maize futures yesterday