Grain silo. Picture: SUNDAY TIMES
CONTINGENCY PLANS: Between 5-million tonnes and 6-million tonnes of maize are due to be imported, and this could place grain silo and milling complexes under pressure. Picture: SUNDAY TIMES

ROAD transport and not rail is due to dominate the distribution of SA’s massive grain imports, which are coming with a price tag of R15bn-R20bn. SA is facing its worst drought since 1992, causing a decline in farming output and forcing the country to import half its maize requirements.

Agriculture, Forestry and Fisheries Minister Senzeni Zokwana said last week that it was urgent the country started importing the grain or SA could run out of maize for human and animal consumption.

State-run logistics company Transnet has given assurances that the country’s ports and tail facilities had the capacity to handle the grain imports. The company had set up a team of experts from its rail and ports operation to "ensure an integrated approach".

Transnet operates handling facilities at the ports of Durban, Cape Town, Port Elizabeth and East London, with capacity at Richards Bay having recently become available.

However, Standard Bank says about 90% of grain in SA is transported by road, with the rest transported by rail. Grain SA, which represents 5,500 farmers, said the percentage of grain transported by road was closer to 75%.

"This has more to do with the lack of maintenance on rail routes that service the grain communities than anything else," said Standard Bank head of vehicle and asset finance, business and commercial, Toni Fritz.

Between 5-million tonnes and 6-million tonnes of maize are due to be imported, up from initial projections of 4-million tonnes.

Private logistics companies are expected to benefit from increased grain imports.

But Standard Bank said farmers with their own fleets of trucks could be hit over and above the lost produce income if their trucks could not be rerouted cost-effectively to harbours.

Transnet has brought 2,000 wagons into operation to add to existing capacity.

Grain SA economist Corné Louw said there would "definitely" be an increase in grain transported by road. However, Transnet said it was "confident" that the bulk of grain imports would be transported by rail.

About 5-million tonnes of maize is expected to be imported in the marketing year running from May 1 this year to April next year, according to Grain SA.

Wheat imports are projected to reach more than 2-million tonnes in the same period.

Under normal conditions, SA usually exports about 2-million tonnes of maize and imports 1.5-million tonnes of wheat.

However, in addition to SA’s own import requirements, this year an estimated 630,000 tonnes of maize imports and 270,000 tonnes of wheat imports are expected to pass through SA’s ports to Zimbabwe, Botswana, Lesotho, Namibia and Swaziland.

The grain value chain has two other key players: the silo complexes and the milling factories.

Ms Fritz said the increased imports of grain would result in more trucks on the harbour routes, coming to and from silo complexes and milling locations, as "grain is no longer coming from farms".

"The transport industry isn’t without its own anxieties and pressures. Logistics companies with nonspecialised carriers and surplus capacity from other industry contracts would be best positioned if they can easily divert surplus fleet along these routes," she said.

Transnet said it was in "constant consultation" with industry stakeholders, including customers, importers and the Department of Agriculture, Forestry and Fisheries, to ensure that the ports and rail system were prepared for the expected increase in imports.

Jan Havenga of the University of Stellenbosch’s Centre for Supply Chain Management said "the port system has contingency plans in place to shift capacity from other commodities to grain import capacity in emergency situations".

Some of Transnet’s facilities, which are traditionally used for export, could be converted to accommodate the grain imports.

Transnet spokesman Mboniso Sigonyela said: "Any intervention will be an integrated effort between ourselves, industry and road, if necessary. For the volumes to be realised, there must be sufficient storage and handling facilities inland to ensure trains are turned around optimally."