South Africa Close to Starting Yellow-Corn Exports to China

Jul 01, 2014 5:00 am ET

(Updates with comment from department in sixth paragraph.)

July 1 (Bloomberg) -- South Africa, the continent’s biggest corn producer, is close to starting its first exports of the yellow variety of the grain to China, according to the biggest organization representing local farmers of the crop.

Talks between the governments are in the final stages, Grain SA Chief Executive Officer Jannie de Villiers said in a June 25 interview. His association is liaising with South Africa’s Agriculture Department.

The government “is in full support of it,” he said. “They have gone through the whole process of doing pest-risk analysis and submitted all the paper work to the Chinese so they can approve of our maize,” he said, using the local term for corn.

South African yellow-corn exports more than doubled to 1.2 million metric tons in the season ended April 30 from a year earlier, the Crop Estimates Committee said on April 29. Shipments of the grain almost quadrupled to a 14-year high in the 2011 season after traders found new markets from Japan to Spain for a surplus that followed a bumper crop. Local farmers may produce 13.9 million tons of white and yellow corn this season, the biggest harvest since 1981, when the nation had an output of 14.1 million tons, the committee said.

“Things have already been concluded, we are just waiting for the political signing on this agreement and then we will be able to sell to China,” said De Villiers.

Talks Concluded

Technical bilateral negotiations have been concluded, Makenosi Maroo, a spokeswoman for the Department of Agriculture, Fisheries and Forestry, said in an e-mailed response to questions today. “The final formalities and signing at the appropriate political level are still required.”

South Africa uses white corn to make staple food known locally as pap, while the yellow type is mainly used to feed animals.

The sooner the deal gets approved the better as this will encourage South African farmers to keep producing surpluses, “which will also be good for the local consumers,” De Villiers said.

Yellow corn for delivery in July declined 0.2 percent to 1,902 rand ($179) a ton by the noon close on the South African Futures Exchange yesterday. The white variety fell 1 percent to 1,792 rand a ton.