NATIONAL COUNCIL OF PROVINCES
WRITTEN REPLY
QUESTION 611
DATE OF PUBLICATION: FRIDAY 25 NOVEMBER 2011 [IQP No 39 -2011] SECOND
SESSION, FOURTH PARLIAMENT
Question 611 for Written Reply: MR O DE BEER (COPE-WC) asked the Minister
for Agriculture, Forestry and Fisheries:
Whether the Government has conducted any investigations into the reasons
why maize was exported at R1 400 a ton while the local price was R2 900 a
ton; if not, why not; if so, what were the findings of the investigations?
REPLY:
It is important to first indicate to the Honourable Member, that the price
of maize, which is an internationally traded commodity, is determined at
the Chicago Board of Trade (CBOT) through the interplay between global
supply and demand. The South African maize price is derived from the CBOT
price and is quoted daily in most daily papers as well as at the South
African Futures Exchange (SAFEX). The futures prices are quoted in the
daily papers or sites for the next 24 months and potential buyers can use
the quoted prices to enter into futures contracts to buy maize at the
published prices. In a situation where one wants to buy maize, the
procedure is that you are required to buy a call option at SAFEX that
provides the right to buy a certain quantity of maize (minimum quantity is
100 tons) at a predetermined price before a preset deadline for delivery at
an agreed date.
The statistics available to the department does not provide any indication
that maize was ever exported for as low as R1 400/ton for the period under
consideration. It is also not reflected anywhere in the available
statistics that maize trades for R2 900/ton in the domestic market.
According to statistics obtained from South Africa Grain Information
Service, the average maize FOB price (export price) for the period starting
from January 2011 to September 2011 is about R2105.53/ton with the highest
export price of R2 332.89/ton being reached in September 2011. Domestic
prices were below R2 000/t for the most part of the period under
consideration and only reached a R2 000/ton mark in August 2011 and
increased slightly in September 2011 to about R2 200/ton. Should maize be
exported at a price lower than the domestic price, the practise would
constitute dumping, a breach of international trade rules (competition
rules) that maize farmers in importing countries will not permit.
In short, the Department has not undertaken any such investigations because
the information at the Departmentâs disposal has not, in any way, suggested
that South African exporters exported maize for less than the domestic
producer prices.