South Africa looks to revive wheat industry

by Eric Schroeder
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Wheat plantings expected to fall after increase in 2016-17.
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WASHINGTON, D.C., U.S. — Despite an uptick in area used for wheat production during the 2016-17 marketing year, South Africa is looking for ways to revive its wheat industry, according to a March 15 report from the Foreign Agricultural Service (FAS) of the U.S. Department of Agriculture (USDA).

The FAS said wheat production area in the 2016-17 marketing year increased 5% in South Africa, driven mainly by drought conditions in the summer grain producing area that led farmers to plant for wheat instead of other crops. But with weather conditions expected to improve in 2017-18, expectations now are for wheat planting trends to revert back to steady declines that have transpired over the past 20 years, the FAS said.

The FAS said the wheat industry in South Africa is looking for ways to revive the industry, including seeking out higher yielding cultivars, making changes to the wheat grading regulations, and implementing an end-point royalty system to counter farm saved seed.

“However, unless drastic technology changes occur that could improve wheat yields, producers will continue to switch to more profitable crops like canola, oats, corn and soybeans, and the decreasing trend in hectares planted with wheat in South Africa will continue in the future,” the FAS noted.

The Crop Estimates Committee (CEC) on Feb. 28 released its final estimate for wheat production in South Africa for the 2016-17 marketing year, reporting the nation produced 1.9 million tonnes of wheat on 508,365 hectares, an increase of 33% from the previous year.

The FAS said annual wheat consumption in South Africa has increased by only about 1% per year over the past five years, reflecting slow economic growth and the availability of cheaper alternatives such as corn and rice.

“With the prices of corn products expected to decrease after last year’s drought, Post does not foresee major shifts in wheat consumption in the 2017-18 (marketing year),” the FAS said. “Wheat demand in the 2017-18 (marketing year) is expected to be around 3.23 million tons. Post estimates that wheat consumption for the 2016-17 (marketing year) will be around 3.20 million tons, in line with a 1% growth rate and marginally higher than the 3.17 million consumed in the 2015-16 (marketing year).”
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