Our maize malaise

NEWS & MEDIA | 05 July 2012

Our maize malaise

As Kevin Lovell pointed out in his insightful article “Brazilian chickens threaten poultry industry jobs” (Business Report, July 3) the South African poultry industry is in crisis.

In Lovell’s view the crisis has been caused by cheap Brazilian imports and to some extent this is true.  However, he trod lightly around the real elephant in the room.

Fully 70 % of the cost of raising chickens lies in the feed, of which yellow maize is the prime ingredient, making the poultry industry one of the country’s largest consumers.

However the government failed to prevent all our stocks of maize from being sold to overseas customers at prices, I understand, of about R1 400 a ton.  As this maize is leaving our shore additional stocks are being frantically imported, primarily to feed the chickens.  The cost of the imported maize is around R2 600 a ton.

If my numbers are correct, then imposing tariffs on Brazilian chicken will do no good at all as exploding input costs will continue to make local chicken more expensive.

The government must step in quickly to subsidise the cost of imported maize.

It must also agree on ways of reserving local maize in future for the poultry industry at reasonable prices.

There is literally no time to waste.

James Cunningham, Cape Times. 5 July 2012