(Bloomberg) -- South Africa’s Agricultural Business Chamber raised its forecast for the country’s corn exports as local consumers use more low-cost grain imported from South America and free up tonnage for drought-hit neighbors.
The country will likely export 1.85 million tons of corn in the 12-month marketing season to the end of April, Wandile Sihlobo, chief economist at the chamber known as Agbiz, said Tuesday in a note sent to Bloomberg. While that’s up 28% from its June forecast of 1.44 million tons, it would still be the least in five years as South Africa’s own crop plunged by a fifth.
The projected increase may go some way toward easing supply shortages in countries such as Zimbabwe and Zambia, which have seen their own crops decimated by a drought triggered by the El Niño weather pattern. Imports from South America will go to South Africa’s coastal poultry producers.
“This leaves more maize in the northern regions for exports to the northern countries,” Sihlobo said in a response to queries.
White corn, used primarily for human consumption in southern Africa, is expected to account for about 1.2 million tons of the exported grain, while the balance would be yellow corn, he said.
South Africa has already exported 606,000 tons of corn since the beginning of May, with about 66% of that being of the white variety, according to the South African Grain Information Service. More than half of that was shipped to Zimbabwe, which has seen its crop fall by about two-thirds.
South Africa is likely to import 350,000 tons of yellow corn in the marketing season, with 135,000 tons having already arrived from Argentina and Brazil, Sihlobo said.
Argentine yellow corn trades at about $188 a ton, compared with about $236 on the South African Futures Exchange for local grain. It’s often cheaper to ship corn to South Africa’s ports than to send it to buyers by road from northern parts of the country.
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