South Africa increasing corn acreage due to record high prices

by World Grain Staff
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WASHINGTON, U.S., D.C. — South Africa is forecasted to plant about 460,000 hectares of wheat in the market year 2016-17, as the declining trend in hectares planted with wheat will continue and record high local corn price should motivate an increase in corn area planted rather than an increase in wheat area, the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) said in a March 24 report.

An area of 460,000 hectares will, on average yields and normal climatic conditions, realize a wheat crop of about 1.7 million, 17% higher than the market year 2015-16 crop of 1.5 million tonnes. As a result, South Africa’s wheat imports for the market year 2016-17 could be 5% lower than in the market year 2015-16 at 1.9 million tonnes.

The area to be planted with corn later in 2016, for the market year 2016-17, will be influenced in a positive manner by record high local corn price levels, especially for white corn prices. Hence, the report forecasts that around 2.8 million hectares of corn will be planted later in 2016 under normal climatic conditions, which is about 10% higher than the five-year average in area planted. Under normal climatic conditions and taking into account the subsistence farming sector, South Africa’s corn crop for the market year 2016-17 could reach 12.6 million tonnes. As a result, South Africa should return to be a net exporter of corn in the market year 2016-17 of about 1 million tonnes of corn.

The report lowered its previous total corn crop (including commercial and subsistence farming) estimate for the market year 2015-16, by 13% or 1 million tonnes to 7 million tonnes on 2.2 million hectares. The report estimates that due to the drought, only about 70% of the normal corn area will be harvested. As a result, South Africa will have to import approximately 3.5 million tonnes of corn in the market year 2015-16.

In market year 2016-17, South Africa’s rice imports are expected to increase by 10% to 1.1 million tonnes on increased demand. The report forecast a 10% increase in South Africa’s rice consumption in market year 2016-17. Consumers can substitute rice, wheat and corn products on price and taste preferences.

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