May 4, 2007

 

South Africa to Buy Record Amount of Argentine Corn

 

 

Reduced corn harvest due to drought will compel South Africa to import a record of yellow corn from Argentina this marketing year for its poultry and livestock sectors, the nation's milling and trading groups said.

 

Being Africa's biggest corn producer, the country may import as much as 1.6 million metric tonnes of the grain in the 12 months ending April 30, 2008; 75 percent more than the year just ended, South Africa's Chamber of Millers and the South African Cereal & Oilseed Traders Association said yesterday.

 

The dry, hot weather will have 2.9 million tonnes harvest of yellow corn this year, 1.8 percent more than last year even as plantings rose 63 percent from the smallest crop in a decade, the government's Crop Estimates Committee said last month.

 

Tomas Hinrichsen, who runs the Buenos Aires- based brokerage J.J. Hinrichsen SA said South Africa will demand a lot more corn with the drought. Argentina, the world's second-largest corn exporter, may harvest 22 million metric tonnes this year, he said, more than the USDA March estimate of 21.5 million tonnes

 

Most of South Africa's corn imports are bought by chicken- processing companies such as Rainbow Chicken Ltd. and Astral Foods Ltd.

 

Still, imports may be limited to about 1.2 million tonnes by inadequate port infrastructure, according to Wouter Mentz, head of trading at Afgri Ltd. The incoming corn will have to compete with imports of about 1 million tonnes of wheat and around 600,000 tonnes of soy and sunflower products, he said.

 

South Africa's 915,000 tonnes of yellow corn imports in 2006 came from Argentina.

 

South Africa's exports of white corn, a variety of the grain used to make the staple food of corn meal in Southern Africa, will probably be between 450,000 and 650,000 tonnes during the year, depending on how much grain neighbouring Zimbabwe needs, the groups said. Toward the end of the year, South Africa may need to import some white corn from the US, they said.

 

In the marketing year just ended, South Africa exported 452,664 tonnes of white corn to 13 African countries and Mexico.

 

Exports may be restrained by inadequate rail infrastructure to the country's ports, said John Gordon, executive director of the South African Cereal & Oil Traders Association.

 

South Africa's white corn crop is estimated at 4.07 million tonnes this year, 0.1 percent more than last year, the committee said.

 

White corn for July delivery closed at 1,720 rand ($246.32) a ton on the South African Futures Exchange in Johannesburg, bringing its gain over the past 12 months to 58 percent. Yellow corn closed at 1,714 rand.