January 15, 2014

Price of South African yellow corn hits record

Triggered by an increased in demand due to dry weather and a fall in the country's currency that made importing more expensive, South African yellow corn rose to the highest price on record.

Yellow corn gained 1.6% to ZAR2,870 (US$264) a tonne by the close of trading on the South African Futures Exchange in Johannesburg, the highest on record.

"The weaker rand means higher import costs, so that's pushing up demand for domestic supply," Thys Grobbelaar, an analyst at Klerksdorp, South Africa-based Senwes Ltd., said.

The South African rand fell to a five-year low against the dollar. Supplies of white and yellow corn have been hampered by low rainfall in the 2012 and 2013 planting seasons, particularly in the North West province.

South Africa has about 3.1 million tonnes of corn stocks remaining until April, when the harvest begins, said Corne Louw, an economist at Grain SA, which represents commercial farmers.

The country consumes about 900,000 tonnes a month, indicating a shortage of about 500,000 tonnes by April. White corn for delivery in March fell 0.1% to ZAR2,928 (US$270) a tonne, while wheat rose 0.5% to ZAR3,728 (US$343) a tonne.