47 / 92
45
April 2015
projected to increase between 8% and 9%. The minimum wage
increase was 6%. It is clear that the expected price increase for
maize meal within a period of four months will have a noticeable
impact on the food basket of the maize consumer.
Yellow maize is mainly used partially as an ingredient in animal
feeds. The yellow maize price increased from R2 026/ton in January
to R2 317/ton (+14%) in February – an increase of R291/ton. If the
same is true for maize meal in the feed industry, it can be expected
that the price of maize meal will increase between 4% and 5% deliv-
ered to the animal feed manufacturer.
Yellow maize meal is a partial ingredient in many feed rations; in
some cases up to 60%, which means that the increase for the animal
feeds industry may for example be between 2% to 3% for certain
feed formulations. The increase in yellow maize meal prices may not
be as severe as the increase in white maize meal prices is for the
primary white maize meal consumer.
According to Table 3 the population grew by 1,49% p.a. between
2005 and 2012. Maize consumption increased over the same period
with 3,25%. Due to the drought conditions, maize prices are fairly
high and the consumption of white maize was raised with only one
percentage point year on year in the Grain SA Supply and Demand.
Grain SA changed the reporting of the supply and demand infor-
mation of maize from 1 May to 30 April each year to 1 March until
28 February. This was mainly done upon request of members to
eliminate the guesswork about early deliveries. Due to the fact that
the month during which the lowest stock levels occur is April, the
import need up until the end of April still needs to be determined.
Early deliveries therefore remain important. Maize delivered early
during March and April, decreases the pipeline requirement accord-
ingly and consequently the need for imports.
The expected early deliveries during March and April will alter the
need for imports later in the marketing year and it will only become
clear as the growing season progresses. This number fluctuated
during the past ten years between 91 000 tons and 842 000 tons.
We estimate that imports at the end of February to supply suffi-
cient feedstock until the end of April need to be supplied by im-
ports of 934 000 tons. Given the possibility of producer deliveries
which may range between 91 000 tons and 842 000 tons, the import
requirement until the end of April 2016 may be anywhere between
1 332 000 tons and 581 000 tons.
Can changes in future crop estimates and
early deliveries alter the need for imports?
The first estimate was published on 26 February 2015. There is
normally an estimate for each month from February until the Final
Estimate in September. The eight estimates are finally concluded
by a reconciliation of the crop estimate with the actual producer de-
liveries during November.
The average deviation in the crop estimate from the first estimate
of the season until the reconciliation in November should also be
considered to determine how it can impact the need for imports. An
increase in the production estimate will limit further imports, while
a decrease in production will increase the need to import. During
the past ten years the total maize crop was underestimated in six
out of ten years. The probability to underestimate the final crop size
is therefore higher.
Table 4
gives the different scenarios for possible imports at fu-
ture changes in production estimates and different early delivery
figures. The outcomes are based on actual historic data for the past
five years. It is therefore quite likely to occur.
Conclusion
Imports during the rest of the 2015/2016 marketing year will
largely be dependent on the size of the new season maize crop and
its development. The follow-up crop estimates until November will
receive a great deal of attention. We do not expect big differences
in consumption.
Role-players will focus on the future crop estimates as it may alter
the need for imports if the estimates change. As soon as the first
intentions to plant are known, it can be expected that the focus
will shift to the size of the expected early deliveries during
March 2016 and April 2016.
The extent of early deliveries will be of special importance for im-
porters. If the number of early deliverable tons of maize is sizable
enough, it may offer some relief for high prices. If early deliveries
however fail to meet some of the need for imports, the latter may
increase substantially at the end of the marketing year.
SA Grain/
Sasol Chemicals (Fertiliser) photo competition
–
Enrico Cronje 2011