Maize prices are rising in South Africa – economist explains the reasons

John Maytham interviews Wandile Sihlobo, Chief Economist at Agbiz.

Listen below.

South Africa's maize production is set to decline by over 19% in 2024, with the Crop Estimates Committee (CEC) projecting a yield of 13.255 million tonnes, down from 16.430 million tonnes in 2023, largely due to El Niño-induced drought.

White maize, a key staple for many South Africans, is expected to drop by 26%, potentially driving food inflation.

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Yellow maize production, mainly used for animal feed, is forecasted to decrease by 12%, while overall summer crop production is expected to fall by over 21%.

Sihlobo reassures that South Africa is not facing a white maize shortage, but neighbouring countries like Zimbabwe, Zambia, and Malawi are importing maize due to high demand. 

"We don't think that necessarily as a country we will run out of white maize."

- Wandile Sihlobo, Chief Economist – Agbiz 

This regional demand, coupled with South Africa’s proximity to these countries, is driving up local maize prices.

Sihlobo warns that if maize prices remain above R6,000 per tonne for an extended period, food prices related to grains may rise slightly.

However, he remains hopeful that the situation is not dire.

"There's a light at the end of the tunnel, because we are starting now a new season, and by all indications, farmers suggest they will plant more area and we are beginning to see some good rains.

- Wandile Sihlobo, Chief Economist – Agbiz 

Scroll up to the audio player to listen to the interview.