Business

Here is why maize meal prices may drop this year

Consequently, South Africa will remain a net exporter of maize in 2025.

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By Tshehla Cornelius Koteli

Analysts predict a much better maize harvest this year in South Africa, as domestic maize prices have dropped in the past months, suggesting that consumers can expect maize meal prices to drop during the year.

Jee-A van der Linde, Senior Economist at Oxford Economics, says improved planting conditions and lower annual fertiliser prices mean stronger agricultural activity across Southern Africa.

The higher crop estimates bode well for the broader region, as maize is an important staple food, and South Africa is a leading exporter for several Southern African countries.

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Smaller increase in maize prices

Van der Linde said the improved crop production at the start of the 2025 planting season should help control food prices later in the year.

“Reliable crop production estimates for South Africa paint an encouraging picture, with maize prices having shifted lower since the start of 2025.

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“Although we expect inflation readings to drift higher over the coming months, the pace should be gradual, with food prices expected to remain reasonably contained,” he explained.

Commercial maize production

Van der Linde adds that, having seen the back of El Niño in 2024, South Africa could yield a commercial maize production of about 14.6 million tonnes in 2025, slightly more than the initial forecast of 13.9 million tonnes, Department of Agriculture, Forestry & Fisheries data shows.

“The production forecast for white maize stands at roughly 7.7 million tonnes, while 6.9 million tonnes is expected for yellow maize this year.

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“Although this year’s total maize harvest is forecast to be 13% higher than last year’s, thanks to better planting conditions this season, it is still below the five-year average of 15.3 million tonnes,” Van der Linde stated.

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SA to remain a net exporter

He says the anticipated output will exceed the average annual maize consumption of roughly 11 million tonnes.

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Consequently, South Africa will remain a net exporter of maize in 2025.

“White maize is South Africa’s foremost field crop, followed by wheat, soybeans, and sunflower seeds. It serves as a key staple food for much of the population, particularly poor households.

“Moreover, South Africa is a leading grain producer on the continent, and as the region’s economic anchor, neighbouring countries also depend on food imports from the country,” said Van der Linde.

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Inflation

He adds that the inflation outlook for Southern African Customs Union (Sacu) countries is favourable, with headline rates within the South African Reserve Bank’s generally recognised inflation target range of 3%-6%.

“We anticipate that headline rates, including food price inflation, will rise gradually for Sacu countries over the coming months; however, this is of little concern given the low starting point for these countries.”

In addition to higher crop output, lower annual fertiliser prices should help contain cost pressures while boosting the agricultural sector by improving the 2025 maize crop’s profit margin prospect,” Van der Linde concluded.

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Published by
By Tshehla Cornelius Koteli
Read more on these topics: agriculturefood pricesinflation