Maize stocks 'sufficient for the short term'
November 22, 2004
By Dirk De Vynck
Cape Town - Even if no rain was to fall in the northern and western parts of the maize belt in the next two months, there would be enough grain to meet demand in the short term, Jaco Grobbelaar, the agricultural economist at Commodity Trading House, said on Friday.
He said that Mpumalanga, in the east of the maize belt, had already had rains and 70 percent of the area was planted. It was reasonably certain that this area would deliver a crop.
The irrigated areas along the Orange and Vaal rivers were also expected to deliver crops.
Grobbelaar said these crops would produce at least 4 million tons of maize, which, with the current surplus of 3.5 million tons, should be enough to meet demand over the next six months. However, such a scenario would put upward pressure on prices.
Grobbelaar said if no rain fell by Christmas, there was a good chance that maize prices could test the R1 100 a ton level, which was the top end of his forecast band. The price of white maize stood at R983 a ton on Friday, after testing R1 025 earlier this month.
If the surplus stock was used up, a bumper crop would be needed in the 2005/06 season. The minimum stock requirement for a full marketing year, from May to April, was about 8.5 million tons.
Although the absence of rain was becoming crucial for the affected areas, there was still time as the planting season ended about mid-January. Grobbelaar said rain was expected early this week, but it was highly unlikely that it would be enough.
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