Posted on January, 16, 2025 at 09:08 am
Faced with a 22% drop in domestic corn production and its smallest crop in five years, South Africa issued permits to allow for the import of genetically engineered corn from the United States.
Corn imports for 2023-24 were estimated at 800,000 tonnes to make up for the shortfall of the 13.3-million-tonne crop, according to a report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture. An El Niño-induced mid-summer drought and excessive heat during the crucial vegetative and flowering stages for corn reduced the yield potential, the FAS said.
Given the high cost of transportation from areas of production, it could be cheaper to import corn into southern ports than to transport domestic crops to millers and feed manufacturers in the southern and western coastal areas, the FAS said.
The nation also will import 6% more wheat in 2023-24 as local demand outpaces production. Wheat is the second most important grain commodity consumed at 56 kg per person after corn (95 kg per person).
Overall, South Africa’s agriculture sector is extremely diverse compared to other countries in the sub-Saharan African region, according to the International Trade Administration (ITA). This diversity is due to the climate that ranges from dry and arid to the Mediterranean in the west and sub-tropical on the east coast.
While grains, including barley, corn, oats, sorghum and wheat, contribute more than 30% in total agricultural product, South Africa also produces oilseeds, fruits, sugar, citrus, nuts and most vegetables. Compared to the rest of Africa, the nation has the most modern and productive agricultural economy, the ITA said.
Animal feed is an important part of the grain supply chain, with about 6 million tonnes of grain and 1.6 million tonnes of oil cake used by the animal feed manufacturing industry per year.
Corn production, trade
Overall, South Africa’s corn yields have more than doubled in the past 30 years, benefiting from the use of new production technologies such as genetically engineered seed and more efficient and effective farming practices like precision and conservation farming, the FAS said.
White corn production in 2023-24 is estimated at 6.4 million tonnes, a drop of 2.6 million tonnes from the previous year, while yellow corn production is estimated at 6.9 million tonnes, a decrease of 1.2 million tonnes, according to the FAS. White corn is the staple food for many households in the region while yellow corn mainly is used for animal feed.
As of November, South Africa had imported 288,000 tonnes of yellow corn, exclusively from Argentina.
Despite the drop in production, South Africa is expected to export about 2 million tonnes of corn in 2023-24, mostly to neighboring countries.
The lower crop in 2023-24 coupled with strong regional demand, especially for white corn, will motivate producers to expand corn area in 2024-25, the FAS said. Assuming a five-year average yield and normal weather conditions, the 2024-25 corn crop could reach 16.5 million tonnes, the agency said.
Wheat production, milling
Production in 2023-24 is estimated at 2.07 million tonnes, a slight decrease from the previous season, according to the FAS. A small increase to 2.1 million tonnes is expected in 2024-25, even with a marginal decline in the wheat area to 530,000 hectares.
South Africa is realizing a positive trend in wheat production, mainly due to higher yields, the FAS said.
“South Africa’s wheat yields have more than doubled over the past 30 years with the introduction of improved cultivars, and more efficient and effective farming practices, including precision and conservation farming,” the FAS said. “With the positive trend in yield improvement expected to continue in the future, South Africa will keep wheat production steady on fewer hectares under normal climatic conditions.”
Wheat and wheat product imports could increase 6% to 2 million tonnes in 2023-24 and maintain that level in 2024-25, the FAS said.
The nation is expected to export 400,000 tonnes of wheat and wheat products in 2024-25 to several countries in the region that are facing an El Niño-induced drought.
Most of the wheat produced is bread wheat, with small quantities of durum wheat for use in pasta production. National bread consumption is estimated at 2.8 billion loaves per year or about 62 loaves per person per year. Less than 2% of wheat production is used as seed and animal feed, as well as other non-food uses such as ethanol production, industrial uses and adhesives, according to the Department of Agriculture, Land Reform and Rural Development.
South Africa’s number of wheat mills dropped from 137 in the 1990s to about 100 in the 2000s. While new mills have been established, about 30 of the largest mills still produce about 97% of the nation’s wheat flour. Capacity is estimated at 406 tonnes per hour with a capacity utilization of 78%.
The milling industry processes about 2 million tonnes of milled wheat per year that are converted into brown bread flour, whole wheat flour, white bread flour, cake flour, self-raising flour and industrial flour, according to the agriculture department.
Oilseeds
In the last 20 years, South Africa has expanded its soybean area eight-fold, planting 135,000 hectares then compared to 1.2 million hectares in 2023-24. Soybeans now represent more than 25% of the area planted with summer rainfall field crops compared to 4% 20 years ago, the FAS said.
“This surge has been driven by farmers’ growing interest in using soybeans as a rotational crop with corn (due to nitrogen fixation), a growing local demand for soybeans through extensive investments in oilseed processing plants, and the adoption of GE soybeans,” the FAS said.
Drought in 2023-24 dropped oilseed production, creating an optimistic outlook for higher crop area in 2024-25, the FAS said. Oilseeds are important rotational crops in South Africa, with soybeans rotating with corn and rapeseed typically rotating with wheat.
The FAS estimated a 27% increase in oilseed production in 2024-25 to 3.36 million tonnes.
“Stable local demand for oilseed crushing, coupled with potential export markets should motivate producers to maintain oilseed area,” the FAS said. “Despite major investments over the past 15 years to expand oilseed processing capabilities, production has exceeded crushing capacity, shifting excess oilseeds to export markets.”
Most soybeans, sunflower seed and rapeseed are crushed to produce edible oil for human consumption and protein meal for animal feed rations. Total oilseed processing capacity is estimated at 2.7 million tonnes. It crushed a record 2.6 million tonnes of oilseeds in 2022-23 and that level of crush is expected in 2023-24 and 2024-25, the FAS said.
Oilseed exports are expected to recover to about 380,000 tonnes in 2024-25 on higher production, following a decline of more than 90% in oilseed exports in 2023-24.
“In the past, South Africa’s trade in oilseeds was generally limited, as the bulk of production was destined for local crushing,” the FAS said. “However, with the surge in the local production of soybean and rapeseed exceeding crushing capacity, exports were pushed to historical high levels.”
Source: World Grain