The record high South African maize prices and the Rand’s fall are expected to have an impact on the supply and cost of maize in Botswana as well.
The price of white maize, in SA has surged 19 percent since the start of December 2013 at a time when the rand’s slump is boosting the cost of imports such as oil.
Fears are rife that should the shortage persist SA traders might import from the global market and that will definitely take the price up as maize is already in high demand outside of South Africa. Meanwhile Botswana milling companies import grain from SA as the local farmers cannot produce enough at this stage.
“We are aware of the impending shortage of maize in South Africa and it will indeed have an impact on the supply and cost of maize in Botswana as well,” said Nkosi Mwaba, the Corporate affairs Manager at Bolux Group.
A drought in the North West region of South Africa has affected farmers’ output and created a significant shortage in supply.
“We are still monitoring the developments in the market and I can confirm that we have not yet reacted to the rising costs at this time. We cannot however, rule out the possibility of increased maize prices in Botswana,” said Mwaba.
Mwaba said the issue of a weaker SA currency which has an adverse impact on the cost of grain should the need to import arise.
In the meantime two leading food suppliers in South Africa have announced that they will be passing on part of the surging cost of grain to consumers in order to remain profitable and sustain their businesses.
In SA white maize prices touched a record on January 6, while the price of yellow maize reached a peak on January 3. Maize stockpiles tumbled 20 percent in November from a year ago.
White maize comprises only about 13 percent of global output, according to the United Nations’ Food and Agriculture Organization, making it difficult to import.