SA set to import US maize for first time since 2017 amid a tight market and record prices

South Africa is looking to import maize from the US – where it is called corn – for the first time in seven years as supplies tighten in the wake of last summer’s searing El Niño-induced drought, which has seen futures prices for the staple white variety scale record highs. 

Agricultural economists caution that this is a protective measure that also reflects the far worse situation in other countries in the region. The maize crop in Zimbabwe, Zambia and Malawi was laid to waste last summer, triggering an unfolding humanitarian disaster. 

“Import permits for genetically engineered (GE) corn from the United States are once again issued by South Africa. After a mid-summer drought that caused a 22% drop in production, South Africa needs to import corn to supplement domestic production,” the US Department of Agriculture (USDA) said earlier this week. 

“Domestic prices have surged due to the tight supply and greater South African exports to meet regional demand.”

Domestic futures prices for white maize – the caloric staple for millions of South African households – soared to record highs above R6,000 a tonne last week and have since remained at or near those peaks. This threatens to rekindle cooling food inflation, a trend that will hit the poor the hardest. 

Read more: Cooling food inflation faces new threat as maize prices soar to record highs 

“South Africa could import approximately 800,000 metric tons of corn (between May 2024 and April 2025),” the USDA said. “During South Africa’s previous severe drought in marketing year 2015/16 and marketing year 2016/17, the United States exported 273,200 tonnes of corn to South Africa at a value of almost $60-million.”

That drought was also caused by El Niño.

If South Africa were to import white maize, it is hard to say how much is available. US grain farmers typically only grow white maize in advance under contract. Outside of southern Africa, the only other major producer of white maize is Mexico.

There are far more options for importing yellow maize, used mostly for animal feed. South Africa has issued import permits for both varieties regarding US maize. 

South Africa, this marketing season, has exported about 1.2 million tonnes of maize, mostly to countries in the region that are experiencing chronic shortages. It is forecast to export about 1.9 million tonnes in total by April, of which 1.2 million tonnes is expected to be of the white variety.

This state of affairs has made supplies tight. And imports can also lower prices for the coastal areas of South Africa because of the high costs of trucking maize from the grain belt to the sea. 

“... given the high cost of transportation from South Africa’s summer rainfall production regions, it could cost less to import corn at the current price levels into southern ports than to transport South Africa’s domestic crop to millers and feed manufacturers located in the southern and western coastal areas,” the USDA said. 

None of this means that South Africa is on the verge of running out of maize. 

“South Africa’s decision to ease possible maize imports from the US is not necessarily a bad thing. It is a ‘safety option’ in recognition that our white maize supplies are tight,” said Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa. 

“Any possible imports from the US will help ease the maize needs in the coastal areas, and some may be for re-exports to the continent. We already have some yellow maize imports from Argentina which have helped our feed industry in the coastal regions massively.” 

And the outlook for this season's crop is looking much better. 

“These challenges are for the near term. We remain optimistic about the new season as farmers continue to till the land across South Africa, and the weather prospects are encouraging.” 

Decent rains across much of the grain-farming region has prompted planting. But the La Niña weather pattern, which typically brings drenching rainfall to this region, has yet to materialise. And if and when it does, it is expected to be weak and over March.

Read more: La Niña remains missing in action, Australian forecasters all but write it off

Still, at least there is no immediate sign of El Niño on the horizon. DM