Bloomberg News

S. Africa’s Surging Corn Price Drives Feed Makers to Wheat

January 16, 2012

(Adds closing prices in last paragraph.)

Jan. 13 (Bloomberg) -- South African livestock feed producers are turning to wheat as an alternative to corn for the first time in a decade after prices of the grain surged, the country’s biggest feed company said.

Wheat is being used for animal feed in Western Cape province, which produces about two fifths of South Africa’s wheat, said an official at Meadow Feeds Ltd., who declined to be identified in line with company policy. Meadow, owned by Pretoria, South Africa-based Astral Foods Ltd., supplies feed for farm animals ranging from chickens and ostriches to cattle.

While yellow corn is still being used, the difference between the cost of wheat produced in the province and corn shipped from provinces in eastern South Africa is making wheat an affordable alternative, he said in a Jan. 11 interview. Corn prices in South Africa have surged after national stocks of the grain plunged 40 percent as of the end of November, the biggest fall in at least a decade, because of a surge in exports.

“This is happening for the first time in roughly 10 years,” he said. Historically, wheat used to be approximately 900 rand ($112) more expensive per ton than yellow corn, but the difference has narrowed, Brink van Wyk, a trader at Bosveld Graan, said in an interview in Johannesburg.

Yellow corn for March delivery closed trade at 2,570 rand a ton on the South African Futures Exchange in Johannesburg, and has increased 39 percent in the last six months while wheat for delivery in that month closed trade at 2,795 rand, a difference of 225 rand. Six months ago wheat was 940 rand more expensive than yellow corn.

--Editors: Antony Sguazzin, Alastair Reed

-0- Jan/12/2012 14:18 GMT

To contact the reporter on this story: Tshepiso Mokhema in Johannesburg at tmokhema@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net -0- Jan/12/2012 12:33 GMT


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus