July 18, 2007

Poor maize crop could dent biofuel hopes

South Africa faces a season of slim pickings after a drought slashed maize production, raising doubts about how the country can produce crops to meet the government's ambitious green energy targets. The projected harvest of 7.05 million tonnes for 2006/07 -- although higher than last season's 6.61 million -- is almost one million tonnes short of annual demand and some local market players fear it could be far smaller.
South Africa wants biofuels to contribute up to 75 percent of renewable energy needs by 2013 and create thousands of jobs -- not only to join the global clean energy drive but to help its struggling farming sector grow the market for its produce. The country has in the past frequently produced more than enough maize to make it a net exporter but this season it may actually need to import white maize to stave off a shortage. "They were very positive to use maize as a source for biofuel when prices were low and the rand was weak but now the maize price is high and the rand is much stronger, which means that ratio is much less favourable than a year or two ago," said Theo Kleynhans, professor in agricultural economics at the University of Stellenbosch. "It means that maize as the main source of biofuels is not viable." (Rts)

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