Logistics industry prepares for record maize crop

South Africa plans to

export in excess of

three million tonnes

of grain this year, and

while challenges remain, the

logistics industry is largely

geared up to handle the

numbers, according to Grain

South Africa CEO, Jannie de

Villiers.

It’s somewhat of a

turnaround from last year

when record import volumes

raised similar concerns. “But

the sector came through very

well in the end, with no stock

shortages,” he said.

South Africa became a net

importer of maize last year to

compensate for a major slump

in local production due to the

crippling drought experienced

over two seasons.

Furthermore, logistics

around exports is far easier

once the product gets to the

port, said De Villiers, noting

that loading onto a ship was

significantly quicker than offloading,

mainly because the

checks and paperwork required

for imports could cause

numerous delays.

He said it was a concern

that Transnet National

Ports Authority’s plans to

deepen the draught at the

grain elevator at the port of

Durban was only scheduled

for 2024/2025. “This means

we still need to load two

smaller ships instead of one

larger vessel, which makes us

less competitive in the global

market place.” According to

De Villiers, loading one larger

vessel could save at least one US

dollar per tonne of maize.

Furthermore, De Villiers

lamented the fact that grain

now had to be mostly moved

via truck instead of rail. “The

truck congestion at the ports

causes inordinate delays and it

is a competitive advantage to

get the product to the market

as quickly as possible,” he

commented.

In the 1980s 85% of grain

was moved by rail but now

only 15% of the product

can be moved as capacity

has lessened dramatically.

“Transnet Freight Rail tells us

that other bulk exports such as

coal and iron ore are easier to

plan, particularly because they

originate from the same points

very year,” De Villiers said.

The difference with grain,

he explained, was that the bulk

volumes could originate from

different points – depending on

where the highest production

was. Furthermore, production

volumes can differ significantly

from season to season.

“However, we did send

our anticipated production

estimates out by December last

year so TFR had plenty of time

to plan,” he added.

De Villiers told FTW

that early indications were

that the projected record

14.5 million tonnes of maize

produced this year might

even be exceeded – which

would make it the biggest

quantity ever produced locally.

“South Africa’s domestic

demand is 10.5 million tonnes,

which leaves potentially three

to four million for export,” he

said, noting that the industry

representative body was more

focused on deep-sea exports.

“Africa produces a lot of

its own maize, although we

are sending white maize to

Kenya. But we have seen

strong demand from Asia –

with Japan, South Korea and

Taiwan our top three export

markets.” He said Grain SA

was also negotiating with

Middle East markets on behalf

of the industry.

“About three decades

ago, Iran

was a major

market for

us and we’d

like to further

explore

market

opportunities

in the whole

region.”

De Villiers

said South

Africa also had

a geographic

advantage as

it was located closer to these

markets than the main export

competitors, the United States

and Brazil.

However, an unexpected

curve ball to the producers’

export hopes has potentially

come from the Minister

of Agriculture, Senzeni

Zokwana, who

told Reuters

news agency in

an interview

recently

that the

government

was also

looking at

stockpiling

the country’s

maize

reserves. This

would entail

a significant

policy shift where

commercial agriculture is

market-driven and the state

does not act as buyer and

holder of crops.

INSERT AND CAPTION

We still need to load

two smaller ships

instead of one larger

vessel, which makes

us less competitive.

– Jannie de Villiers