WINDHOEK – In the absence of the much needed late rains in March, maize producers in Namibia will only be able to supply less than 30 percent (some 30 000 tonnes) of local demand.
This will be some 25 000 tonnes less than last year when the country harvested 57 000 tonnes and supplied 47 percent of domestic demand.
The CEO of Namib Mills and Namib Poultry, Ian Collard, says Namibia requires roughly 120 000 tonnes of white maze for human consumption and some 50 000 tonnes of yellow maize for animal fodder.
The chairperson of the Agronomic Producers Association, Gernot Eggert, told Farmers Forum that the devastation of the maize fields in rain-fed areas such as the maize triangle between Grootfontein, Tsumeb, and Otavi is the worst he has seen in the last decade or more.
He says expectations have dropped even further and it is doubtful if 30 000 tonnes will be harvested. “This is a catastrophe,” he lamented.
That means Namibia will have to import some 180 000 tonnes of maize this season. The most lucrative of these products is white maize, and the local marketing scheme ensures local millers must first use all local white maize before the deficit can be imported.
Due to the government’s agreement with producers and manufacturers the harvest increased from some 5 000 tonnes in the 1990s to more than 10 times that in 2018, but this season everything has been undone.
Collard says yields are lower in Namibia due to rainfall, soil quality, farm practices as well as the fact that only non-genetically modified organism (GMO) seed is allowed to be planted in the country.
He stresses that it is of utmost importance that government, producers and food manufacturers work together and ensure the industry grows and develops further.
He also emphasises that it is very important for Namibia to understand the grain situation in South Africa (SA), as SA is the largest producer of maize in the region and all markets in the region react to their price, specifically with regard to Safex, which is the most relevant public grain trading platform in the region.
“Due to weather scares, and traders reacting to the afore-mentioned, significant price movements on Safex were witnessed. White maize prices during the middle of November 2018 were around R2 400 (N$2 400) per tonne, climbing 38 percent to R3 300 (N$3 300) per tonne by February. After positive rainfall was received in the central and north-western maize production areas of South Africa, white maize prices fell by 15 percent to settle at the current level of around N$2 700 per tonne,” he notes.
“The total South Africa maize (white and yellow) estimate is still a very positive 2.2 million hectares, which is thought to be conservative by many market players. Based on previous season yields, South Africa could see a 12 million tonnes harvest for the 2019 season. As there is still carry-over stock of more than three million tonnes and consumption of 11 million tonnes, South Africa could grow their carry-over stock to four million tonnes if the rest of the season is favourable. A more conservative harvest of ten million tonnes would still mean South Africa has two million tonnes of carry-over stock into the 2020 season,” informs Collard.
One of the most important aspects to take into consideration regarding the price of maize is the difference in import and export parity.
“When South Africa has a grain deficit, the South Africa price moves to an import parity price, which means South Africa maize prices increase to such levels that internationally traded maize can ship to, and compete with South Africa maize, to mills located in South Africa. Farmers then have the benefit of higher prices. When there is a surplus of grain, South Africa maize prices decrease to export parity, which is the level that South Africa maize is competitive on the global stage, and can price into international markets usually serviced by other surplus-producing origins, such as Brazil, Argentina, and the USA.”
Collard adds that the price difference between import parity and export parity is vast, with the former being about N$2 800 per tonne and the latter being some N$1 900, meaning a 30 percent price shift between either too much or not enough maize in the market.