Inflation set to rise as maize crop wilts

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The latest data support views that inflation will accelerate in coming months. The Crop Estimates Committee's third production forecast released on Wednesday showed the expected commercial maize crop was revised up to 9.76-million tonnes from 9.67-million tonnes.

"The production forecast of white maize is 4.659-million tonnes, which is 0.42% or 19,400 tonnes more than the 4.639-million tonnes of the previous forecast," the committee said.

The production forecast for yellow maize was 5.104-million tonnes, 1.53% or 76,800 tonnes more than the previous estimate of 5.027-million tonnes.

The latest revisions were marginal and were unlikely to make "a big difference" as SA would probably need to import maize, Economists.co.za chief economist Mike Schussler said.

All imports were expected to be of yellow maize, said Grain SA economist Wandile Sihlobo, who added that the rand would play a major role.

"The rand is generally at weak levels, and that makes it expensive to import maize, consequently higher food prices for consumers are possible," Sihlobo said.

White maize is the staple food for most households while yellow maize is used for animal feed.

Drought in various parts of the country severely affected crops and raised maize prices.

The current estimate of 9.763-million tonnes was still low compared with last year's 14.250-million tonnes.

Bloomberg reported last month SA imported three shipments of 30,000 tonnes each of yellow maize from Argentina.

Consumers have seen the effects of the shortfalls on the shelves, according to a food price barometer released on Wednesday.

Although the Pietermaritzburg Agency for Community Social Action (Pacsa) food price barometer uses a small sample of prices from only a few retailers, it provides a suggestion of food-price development.

On Wednesday's barometer showed a 25kg bag of maize meal that cost R147.82 in January rose to R158.99 last month.