SOUTH AFRICA – Maize prices in South Africa are under pressure due to a combination of production difficulties, exchange rate fluctuations, and growing international competition, according to Paul Makube, senior agricultural economist at FNB.
While current maize prices remain high, Makube predicts significant shifts in the coming season, influenced by both local and international factors.
“The current elevated maize prices are largely due to weather-related disruptions, such as the recent summer drought that significantly affected white maize production,” explains Makube.
This drought has reduced the white maize harvest by nearly 20% compared to last year, tightening supply and pushing prices higher.
White maize, a staple for millions of South Africans, is at the forefront of this price increase, which is driving food costs upward and placing additional financial strain on households.
“With many South Africans relying on white maize as an affordable food source, the price hikes are becoming a burden on consumers,” Makube adds, emphasizing the critical implications for food security in the country.
Makube, however, noted that while challenges persist, better production conditions in the next growing season could help stabilize prices, although, this presents another concern for farmers.
“We expect a sharp decline in maize prices in 2025, largely due to an anticipated increase in production,” Makube says.
Though this drop may provide relief for consumers, it poses a challenge to farmers, who may struggle to maintain profitability amid lower prices.
Internationally, maize prices are relatively low due to oversupply from major producers like the United States and South America.
Combined with a strengthening rand and improved local weather forecasts, this global oversupply suggests that South African maize prices could fall considerably in the coming year.
Futures markets also indicate a likely decline, with July 2025 futures trading below R4,000 per tonne, heightening concerns over the financial sustainability of maize farming.
Input costs, geopolitical tensions add complexity
Despite recent reductions in input costs, particularly for fertilizers and fuel, ongoing geopolitical tensions in the Middle East could reverse these gains.
“South African farmers import around 80% of their fertilizer needs, and although international prices have dropped by as much as 30% compared to last year, these savings have not yet fully reached the local market,” Makube says. This delay in cost relief complicates farmers’ ability to budget and plan for the next season.
Adding to this complexity is the high cost of yellow maize, with prices ranging from R4,000 to R4,400 per tonne.
Millers and processors, especially those in coastal areas with limited yellow maize production, are increasingly turning to imports from countries like Brazil and Argentina, where prices are more competitive.
“For some coastal processors, it’s cheaper to import yellow maize from overseas than to buy from local inland producers,” says Makube, noting that this could force local farmers to export their crops to remain viable.
Looking ahead to the 2025 season, the South African maize sector faces a delicate balancing act. Both farmers and consumers are confronting an uncertain path forward amid production gains, cost volatility, and international competition.
“While the outlook for production is positive, the volatility in input costs and increasing international competition mean that farmers and consumers are facing a somewhat uncertain road ahead,” Makube noted.
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