South African corn prices tumble on improved weather outlook

24.04.2017

Corn prices in South Africa have fallen for seven straight sessions, as the rand rises against the dollar, and weather worries ebb away in late planted regions.

July white corn futures are down 1.2% on the day, and 7.4% on the week, at 1,836 rand.

July yellow corn futures finished down 1.9%, at 1,945 rand, down 7.3% on the week.

Wandile Sihlobo, at AgBiz, said prices were being supported in part by the strength of the rand against dollar.

"The other factor that we see playing a part is really good corn conditions," Mr Sihlobo told Agrimoney.

There have been dryness concerns in some of the country's late-planted corn areas, but Mr Sihlobo said that "over the Easter weekend those regions received good rains".

Zambian export prospects

On Friday the president of Zambia announced that a temporary ban on exports would be lifted this year, as a production surplus is expected.

Zambia suspended foreign sales after a drought last year, but this policy will be reversed, due to fears among farmers that a surplus of grain would suppress prices in the new season.

The Zambian corn crop is expected at 2.87m tonnes, some 1m tonnes above domestic demand, although the state-run food agency has a mandate to keep strategic reserves at a hefty 500,000 tonnes.

A boon for Kenya

Mr Sihlobo said the potential for Zambian exports "comes to some extent as a surprise… and it presents some interesting dynamics".

South Africa is headed for a huge exportable surplus of white corn, of around 2m tonnes.

"Now you have Zambia coming onto the market… and in Malawi production is increasing," Mr Sihlobo said.

Still, an abundance of staple white corn could be a welcome surprise for Kenya and Ethiopia, which are facing a domestic shortfall due to the fall army worm outbreak, and an intense regional drought.

Kenya has already said it will import 400,000 tonnes of yellow corn from Ukraine, to meet local demand, but Zambian white corn supplies could meet that need, Mr Siholobo said.

South Africa is effectively shut out of the Kenyan market, Mr Sihlobo added, due to restrictions on imports of genetically modified crops.


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