Picture: RUSSELL ROBERTS
Picture: RUSSELL ROBERTS

SOUTH African maize prices maintained their record run into 2016, scaling historic highs on Monday amid growing drought concerns and rand weakness.

The March contract for white maize added almost 2.6% to a new record of R4,781 a tonne while the same contract for the yellow variety climbed 1.8% to R3,677 a tonne.

Prices for white maize, the staple crop that provides much of the caloric intake for SA’s lower-income households, more than doubled in 2015, while those for yellow maize, used for animal feed, rose about 70% last year.

"We are past optimal planting times in much of the Free State and North West. The guys cannot plant because it is too dry," said one local maize trader, referring to the key growing areas in the western part of the maize belt.

"Even the crop that has been planted is suffering in this heat," he added.

After the market closed, Agriculture, Forestry and Fisheries Minister Senzeni Zokwana said SA, the continent’s top maize producer, might have to import the grain if the drought persists.

"If there is no rain, we may be compelled to import maize around May or June," Mr Zokwana told journalists.

The searing drought has been exacerbated by an El Nino weather system, a warming of ocean surface temperatures in the eastern and central Pacific that occurs every few years, with global consequences.

It follows a bad harvest last season when dry conditions shrivelled the maize crop by a third to 9.94-million tonnes, the lowest since 2007.

This is worrying for policy makers. The South African Reserve Bank, which is in a tightening cycle, has frequently expressed concern about the effect of the drought and food price pressures on inflation in Africa’s most advanced economy.

Reuters