JSE announces sunflower location differential and storing costs

The JSE has announced the sunflower location differentials and storing costs for the new marketing year (2014/2015), which commenced on 1 February. They use a formula-based method to determine the location differentials for sunflower.

RPT = (Distance * RLF * RPK)/Payload Distance
RLF — return load factor
RPK — rand per kilometre
Payload — load is 30 tons.

The average increase in the location differential in relation to the previous marketing year, amounts to 7,29%. Against this, the wholesale price for diesel has increased with more than 16% year-on-year. The complete list of differentials is available on Grain SA's website.
The standard storing costs for the period from 1 February 2014 to 28 February 2015 are raised with the PPI figure that was published by the end of November 2013. The PPI figure amounts to 6,3% and therefore the new storing costs involved in the completion of futures, amount to R1,22 per ton. The JSE henceforth receives sunflower only on a clean basis. Take note that the Department of Agriculture, Forestry and Fisheries' regulations in this regard has not yet been adjusted accordingly.

JSE maize location differential
The JSE is currently waiting until 7 February 2014 for transport tariffs and road:rail outloading percentages in order to determine the new tariffs according to the formula approach. The proposed differentials should be published for commentary within the next week, whereafter revision can be done. The new maize location differentials should be announced mid-March.

Additional JSE sorghum contract
The JSE has implemented an additional sorghum contract for Class GH sorghum and specifically GH1 sorghum (bitter sorghum). The following eleven delivery points are involved: Derby, Gerdau, Hibernia, Koster, Battery, Libertas, Northam, Arlington, Potchefstroom, Raathsvlei and Ventersdorp.
With effect from Friday, 24 January 2014, the July 2014 and September 2014 contracts were available for trading. Both quality types can now be traded on the JSE. A further investigation has been received to allow the delivery of sweet sorghum on the GM1 contract, and the JSE is currently still awaiting commentary hereon. For any further enquiries or contributions regarding the abovementioned matters, please contact Wessel Lemmer on 086 004 7246.

Source:  Wessel Lemmer, senior economist, market research, Grain SA. 

#IFAMAFRICA