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South Africa Imports Corn as Stocks Decline to 9-Month Low

Feb. 25 (Bloomberg) -- South Africa is importing yellow corn for the first time in 22 months as stocks of the grain declined to a nine-month low in January, Senwes Ltd. said.

Stockpiles of both white and yellow corn declined 31 percent to 2.34 million metric tons, the lowest since April, at the end of last month from a year earlier, Pretoria-based South African Grain Information Service said in a statement on its website yesterday. The country had 946,076 tons of yellow corn, the smallest amount in nine months, and 1.39 million tons of white, according to Sagis.

Local prices of both varieties rose to a record last month as drought in some growing regions curbed output. Grain SA, which represents commercial farmers, said in January that stocks would be tight for the rest of the season, until the harvest begins in April. Tiger Brands Ltd., the biggest South African food company, said last month it would consider importing corn in the event of a supply shortage.

“We need to import,” Thys Grobbelaar, an analyst at Klerksdorp-based Senwes, said by phone. “About three ships from the Black Sea are on their way with about 50,000 tons of yellow maize,” he said, using the local term for corn.

The country, which is the continent’s biggest corn producer, last imported the white variety, used to make a staple food known as pap, in October 2012. It last brought in the yellow type, which is mainly fed to animals locally, in April that year, according to Sagis data.

Import Difficulty

South African exported 1.84 million tons since the start of the season in May until last week, 42 percent more than the same period a year earlier, Sagis data showed today.

White corn comprises only about 13 percent of global output, according to the United Nations’ Food and Agriculture Organization. This makes it difficult to import. Southern African nations’ preference for this type of the grain means the region is less likely to take advantage of a slump in global prices spurred by record harvests of corn, mainly yellow, from the U.S. to Brazil.

“It will be impossible to import from Africa,” Senwes’s Grobbelaar said. “There is no place where we can import white maize from.”

White corn for delivery in July gained 0.2 percent to 2,090 rand ($194) a ton by the close of trading in Johannesburg today. The yellow variety for delivery in the same month rose 0.8 percent to 2,179 rand a ton.

To contact the reporter on this story: Tshepiso Mokhema in Johannesburg at tmokhema1@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

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