South African maize too expensive for WFP

Increasing maize prices in South Africa, partly due to drought and currency fluctuations, have forced the WFP to look to foreign markets to procure food aid for its emergency operation in Southern Africa.

"It's unfortunate that South Africa may be heading into drought at a time when Southern Africa has a huge need for food," Mike Sackett, WFP Southern Africa Regional Director, said in a statement.

WFP had sourced "substantial amounts of maize from the South African market over the last 18 months to feed millions of people across the region". But South Africa is simply no longer competitive, he said.

WFP has been carrying out emergency feeding in the region since 2001. At the peak of its operations last year 10.2 million people received WFP food aid.

Since January 2003, WFP has procured nearly a quarter of million tons of maize in South Africa totalling more than US $35.5 million.

White maize prices in South Africa have increased by 32 percent since 1 December, rising from R927 (about US $142) for 1 mt to R1,225 (about US $188).

The strength of the South African currency has also played a role in the affordability of maize. The rand has streadily risen against all major currencies over the last year. For example, two years ago one US dollar would have bought about 13 rand, currently it's trading at R6.60 to the greenback.

"Not all donations to WFP are in US dollars and currency fluctuations in general don't play a role in what we can afford to buy as usually one currency's weakness will be offset by another's strengthening," said Mike Huggins, WFP spokesman. "The problem is that due to the strength of the rand, we are able to buy less for our money on the South African market and this combined with a rise in maize prices because of drought fears, means South Africa is just no longer competitive with the rest of the world."

Sackett added: "WFP still needs to procure more than 100,000 mt of maize for hungry people across Southern Africa between now and the end of June 2004, and the fact of the matter is that it's cheaper for us to buy food overseas and ship it here than it is to buy food in South Africa."

Huggins warned that WFP was still facing a "dire situation" with regard to its Southern Africa appeal.

"We appealed for US $311 million in June and to date we have received US $149 million, which leaves a 51 percent shortfall. Given that we are heading into the lean season it's going to be a very bleak picture for the Christmas period and into the new year," Huggins said.

The need for food assistance is still significant in the region and WFP is currently trying to feed 6.5 million people in Zimbabwe, Zambia, Lesotho, Swaziland, Malawi, and Mozambique.