South Africa : Maize price plunge sets stage for consumer relief, but farmers feel the pinch
Maize prices in South Africa have fallen 40–50% year on year due to record global supply and a strong local harvest. While this should ease food costs for consumers and livestock producers, it is squeezing farmers’ margins amid high input costs and slow export flows.
Maize prices have dropped between 40% and 50% compared to the same time last year, a decline expected to bring some relief to South African consumers in the coming months as lower input costs feed through to food prices.
However, the sharp fall is less than ideal for local producers, many of whom are battling tight margins, high input costs and the lingering effects of erratic weather patterns.
According to market data from Grain SA, the spot price of white maize stood at R3,506 per tonne on January 12, down nearly 50% from R6,776 per tonne a year ago. Yellow maize, primarily used as animal feed, has also seen a steep decline, trading about 40% lower year on year.
Economist at Grain SA, Heleen Viljoen, said several factors were behind the sharp decline in local maize prices: “One of the reasons is the world had a record maize production year, which put international prices under pressure.”
“At the same time, local production recovered to the second largest total maize harvest since the 2016/2017 season,” after a severe mid-summer drought hampered yields in the previous season.
The maize harvest on record for the 2024-25 season is about 16.44-million tonnes. According to Agbiz chief economist Wandile Sihlobo, South Africa’s maize consumption is about 12-million tonnes, “and the current harvest is well above domestic demand”.
“Maize prices are likely to remain at the lower levels for some time, which is positive for consumers and the livestock industry, which primarily uses yellow maize,” he said.
Maize prices are likely to remain at the lower levels for some time, which is positive for consumers and the livestock industry, which primarily uses yellow maize— Wandile Sihlobo, Agbiz chief economist
Another reason for the lower prices, according to Viljoen, is the sharp rise in local production shifted prices from import parity to export parity, enabling South Africa to achieve surplus maize exports. “However, South Africa’s export pace was slower than needed, leaving us with carryover stocks that are suppressing prices,” she said.
Sihlobo forecast the country’s 2025-26 maize exports at 2.4-million tonnes. “About 1.4 million tonnes will be white maize and 1-million tonnes yellow maize, for a total of 2.4-million tonnes of exports,” he said, adding the country has exported just over half of the expected maize.
Viljoen noted it typically takes three to five months for lower commodity prices to filter through to consumer-level food prices.
However, lower prices for consumers come at a cost. It “places South Africa’s producers under severe financial pressure,” Viljoen said, adding input costs have risen sharply even as selling prices have fallen.
“Consumer data from [the South African Revenue Service] shows product prices continued to rise year on year up to November,” she said.
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Source : Business Day
