With over 1,1 million tons more maize expected from South Africa’s 2011/2012 crop than for the preceding season, local prices have been put under pressure.
The Agricultural Business Chamber (AgBiz) reported that current maize prices dropped from around R2 700/t earlier in the year to about R2 200/t over September 2012. AgBiz CEO Dr John Purchase said that there was a carryover stock of just under 1 million tons of maize from SA’s previous marketing season.
Wessel Lemmer, Grain SA’s senior economist: market research, expressed concern for producers because domestic maize prices are trading at export parity levels and global maize prices could – in the short-term – impact further on these. “US maize prices are currently experiencing price pressure due to harvest pressure from soya beans and maize, as well as the current liquidation of long positions by funds,” said Lemmer.
“In the US, producers are advised not to sell but to wait for opportunities that may surface later. Consumers are encouraged to use current opportunities to cover stock until the end of the year.” AgBiz cautioned that there was also uncertainty in the maize market in terms of the longer price trend as an uncertain rainfall season was expected for the coming summer, due to the current El Niño climate phenomenon.
“So much can happen, either way in terms of final production volumes and the availability of surplus maize for exports for the coming season,” said Purchase. “But AgBiz generally remains bullish for the coming season, also because good spring rains have already fallen in a number of production areas.” SA’s Crop Estimates Committee’s final production estimate for summer crops for the 2011/2012 season is:
Article source: www.farmersweekly.co.za
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