Government approves Brazilian maize imports, SACOTA says it’s cheaper than buying SA crop

Fears of maize shortage in South Africa have been met with a decision to allow imports of Brazilian maize for parts of the country.

The South African Cereals and Oilseeds Trade Association (SACOTA) has welcomed the news from the Department of Agriculture.

The association says it costs less to import yellow maize from South America to some coastal areas in South Africa than to buy it locally.

Dr André van der Vyver, executive director at SACOTA says the news comes after weeks of discussions with the department about greenlighting the Brazilian maize imports.

“This is an important step forward in ensuring food security for South Africa this season.”

Shortage of maize in SA

Dr van der Vywer says it was realised months ago that SA needs to import yellow maize following the decrease in production and an increase in prices.

“On the Johannesburg Stock Exchange (JSE), December traded yellow maize futures contract, prices increased from approximately R3 800 in January 2024 to R4 700 in May 2024, an increase of 19%,” he says.

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Local maize expensive to deliver to Cape Town

He explains that local prices dropped due to lower international prices and a stronger Rand. But when they compare, imported maize was approximately $15-20 (or R275 – R300) per ton cheaper than local maize.

Meaning maize was more expensive to buy locally for those in the Western Cape, parts of the Eastern Cape and possibly the coastal areas of KwaZulu-Natal.

“The price in the Western Cape could be attributed to the high transportation cost from the inland areas to the broader Cape Town area. It costs approximately the same to transport one ton of maize from South America to Cape Town than from the local inland production areas to Cape Town.”

Imports of Maize

He says the first batch of Argentinian maize was important at the end of April 2024. Quoting the National Agricultural Marketing Council (NAMC) Supply & Demand, he adds it was estimated that 383,000 tons of maize could be imported this season.

“But for that amount to be imported, it will depend a lot on future price trends (global vs local) and the demand from Southern African Development Community (SADC) countries. Until 2 August 2024, already 168,000 tons of maize have been imported.”

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Dr van der Vywer adds that SA cannot import maize from anywhere. According to the local Genetically Modified Organisms (GMO), the list of cultivars approved in the exporting country must be synchronised with the local lists maintained by the Department of Agriculture.

“This is even though the imported maize will be transported directly from the harbour to the feed processing plants and is prohibited from being used as seed. Synchronising inter-country lists is a complex process as GMO cultivars these days mostly consist of stacked events.”

SACOTA calls out the multi-national seed developers to obtain confirmation that these events were not commercially released in the exporting country.

“Argentina is experiencing a harbour export strike. Brazilian maize also is likely to price a few dollars cheaper in the coming weeks, which could help to curb rising local prices.”