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South Africa grain group sees 3.5Mt maize surplus this year

South Africa producer group Grain SA expects a surplus of 3.5-million tonnes of maize when this season’s harvest is complete and aims to export all of it with orders in from Japan, South Korea and Taiwan, its chief executive said on Tuesday.

South Africa will likely harvest 14.54-million tonnes of maize in 2017, up 87% from last year’s drought-hit crop after rains returned, the government’s Crop Estimates Committee forecast last month. South Africa’s domestic consumption is usually around 10.5-million tonnes or more.

“Japan, South Korea and Taiwan, those are three countries that have ordered a lot of maize from South Africa,” Grain SA chief executive Jannie de Villiers told Reuters on the side lines of an industry conference.

“We need to export that 3.5-million tonnes,” he said.

De Villiers said the first export permits for this season for Taiwan were expected to be issued by the government this week.

He also said South African farmers and traders were looking at demand in the Middle East, where yellow maize is needed for animal feed, and hoped to export the grain to Saudi Arabia and other countries in the region this year.

The crop is currently being harvested as the southern hemisphere winter sets in but South African farmers are getting far less for their grain than they did last year.

The July white maize contract was down 2.05% on Tuesday at R1 815/t, around 66% lower than record peaks of more than R5 000/t scaled early last year during the drought.

The government has expressed concern about the surplus being sold off with the looming possibility of a return this year of the El Nino weather pattern which triggered last season’s drought.

Agriculture Minister Senzeni Zokwana told Reuters last month that the government was considering establishing a strategic grain reserve, which would buy and store excess maize in case of shortages.

Source : Engineering News