Maize prices still high

Drought jitters put upward pressure on food prices MAIZE prices remained near record highs yesterday on drought jitters, with the only pressure coming from a rand rebound after President Jacob Zuma named respected Pravin Gordhan as finance minister. The December white maize contract was 2.8% lower at R3 992 a ton, near the record R4 100 it scaled last week, according to Thomson Reuters data. White maize is the staple crop that provides the main source of kilojoules for lowerincome households. Traders said the main reason behind the dip was the rand’s surge of more than 5% after Zuma gave Gordhan the job late on Sunday. Rand weakness makes it more expensive to import maize and shortages are widely expected as farmers grapple with a searing drought exacerbated by an El Nino weather pattern.

This in turn puts upward pressure on food prices and inflation, with the poor majority being the hardest hit – a scenario that could have political consequences for the ANC ahead of local government elections next year. The weather remains a concern. “We had a little bit of rain over the weekend in areas where we need it in the Free State, but we need more. “And we need follow-up rain,” one trader said. The forecast remains bad for grain farmers, with below-average rainfall and above-average temperatures expected for most of the country throughout the course of the summer, according to forecasters at the South African Weather Service.