South Africa expects return to corn exporter

by Holly Demaree
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Corn feed
In 2015-16, drought is forcing nation to import close to 3 million tons.
 
WASHINGTON, D.C., U.S. — South Africa’s total corn crop for 2016-17 may reach 12.8 million tons assuming normal climatic conditions and taking into account the subsistence farming sector, the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) said in an Oct. 28 report.

The nation should again be a net exporter of corn estimated at 1 million tons.

In 2015-16, South Africa will need to import 3 million tons of corn due to drought. Production is estimated at 8 million tons, almost 40% lower than its normal corn crop. So far, the nation has imported 800,000 tons of yellow corn, mainly from Argentina, and 335,000 tons of white corn, mainly from Mexico. Due to the slow pace of approval by the South African government, the U.S. is still not allowed to export genetically engineered corn to be used for food and feed.

According to the FAS, the area to be planted with corn in 2016 for the 2016-17 market year, will be influenced in a positive manner by relatively high local corn price levels. Local corn prices are expected to trade at import parity price levels in the near future, giving farmers enough initiative to plant more fields to corn. In addition widespread rain has fallen in the corn producing areas of the country, enabling farmers on the eastern side to start planting corn within the optimum planting window. The report forecasts that around 2.7 million commercial hectares of corn will be planted in 2016-17, which is about 10% higher than the 10-year average in area planted.

The FAS increased its forecast for South Africa’s commercial demand for corn in the 2015-16 market year by 2% to 10.2 million tons and kept the corn consumption estimate for animal feed unchanged at 5.1 million tons, but increased the estimated demand for corn for human consumption by 200,000 tons to 4.8 million tons.

This means that the total demand for corn is expected to drop by 3% in 2015-16, from the 10.5 million tons of corn consumed in the 2014-15 year. The major reasons for the expected drop are the drought related higher corn prices and the sluggish economic growth that is impacting negatively on the demand for corn, the report said.
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