SA imports yellow maize from Argentina, Ukraine

Drought-hit South Africa is set to receive 228 400 tons of yellow maize in the coming days.

Johannesburg/Hamburg - South Africa, which needs to import millions of tons of maize this year because of a drought, will source hundreds of thousands of tons of white maize in the coming months from Mexico, likely beginning in May, local and foreign traders said.

White maize is the staple source of calories for most South African households but shortages are looming, driving up domestic food prices and inflation.

Read: SA to cut maize forecast

Africa's most advanced economy is also set to receive 228 400 tons of the yellow variety of the grain in the coming days, according to Thomson Reuters' interactive shipping map.

Domestic maize prices in South Africa are near recently-scaled record highs because of the drought. The government's Crop Estimates Committee has forecast the crop will be 27 percent lower in 2016 at 7.255 million tons.

South Africa consumes around 10 million tons of maize annually and so far this marketing season, which ends on April 30, has imported 1.4 million tons, around 95 percent of which has been yellow maize, mostly used for animal feed.

South Africa's corn conundrum stems from the fact that while yellow maize is grown widely grown elsewhere and easily sourced, the white version outside of the region can only be sourced from Mexico and the United States.

The July white maize contract is trading at R4 881 ($317) a ton, near its record of R5 179 hit in January. It is currently at a 50 percent premium to yellow maize , which ended Wednesday at R3 260.

Thomson Reuters' Eikon interactive map, which tracks ships including their cargoes and destinations, shows that six vessels will deliver yellow maize from Argentina to South African ports between now and March 17. One ship with 25 000 tons from Ukraine will also be offloading.

The total is 228 400 tons as the pace of maize imports into South Africa picks up. According to the South African Grain Information Service, 147 600 tons was imported in the week ending March 4, and 150 500 tons the week before - the two largest weekly volumes in the 2015/16 marketing season so far.

In white maize, traders said deals had been agreed to import from Mexico for May to August but precise volumes are not known.

South Africa is seen needing imports of at least a further 3.8 million tons of maize heading into the next marketing year from May.

“Maize will be coming from Mexico and it will be mostly non-GMO. But there has been complaints about the quality of a previous shipment from there,” said one trader who asked not to be named.

South Africa may need to mix white with yellow maize, but that will not go well with local consumers, who regard the yellow variety as “animal feed”.

REUTERS