South Africa
South Africa’s grains production is set to recover due to much better weather, but a long-term trend away from wheat continues, leaving the milling industry dependent on imports. For farmers, corn and oilseeds (helped by investment in processing capacity) are more financially attractive crops.

According to the International Grains Council (IGC), South Africa’s total grains production in 2016-17 will be 14.9 million tonnes, up from 10.1 million the year before. Production of wheat is forecast at 1.9 million tonnes, up from 1.4 million the previous year.

The IGC put corn production at 12.5 million tonnes, up from 8.2 million. The country is also forecast to produce an unchanged 100,000 tonnes of sorghum.

South Africa is expected to import a total of 4.1 million tonnes of grain in 2016-17, down from 5.1 million the year before. Exports are forecast at a total 1 million tonnes, up from 900,000.

Wheat imports are put at 1.9 million tonnes this year, down from 2.3 million the year before. South Africa is expected to export 900,000 tonnes of maize this year, compared with 700,000 last year.

South Africa’s imports of rice in 2016-17 are projected at an unchanged 900,000 tonnes.

The IGC also explained the rise in production.

“Helped by widespread rains, conditions in South Africa are much improved compared to the past two seasons,” the IGC said.

The IGC identified a potential problem for producers of some crops.

“The presence of fall armyworm, an invasive airborne pest with a wide potential host range, including maize, sorghum and rice, was recently confirmed in Malawi, Mozambique, Namibia, South Africa, Zambia and Zimbabwe,” it said. “As 85% of South Africa’s commercial corn crop is planted with genetically modified varieties, engineered for insect resistance, the potential for damage there might be more limited than in neighboring countries.”

Farmers in southern Africa, including South Africa, have called for action.

“The armyworm is known to have a negative impact on agriculture, food security and trade, making Sub-Saharan Africa more vulnerable due to its high dependence on agriculture,” said Dr. Theo de Jager, president of SACAU, the Southern African Confederation of Agricultural Unions. Jager made the comments following a meeting of interested organizations in Harare, Zimbabwe, in February.

Although genetically modified corn is widely grown in South Africa, differing regulations have meant problems in trade with the United States until the problem was solved late last year.

“On Dec. 5, 2016, the registrar of the GMO Act informed stakeholders that all corn genetically engineered (GE) events that caused asynchrony with the United States were approved by the Executive Council and the registrar invited applications for permits from importers,” the attaché reported in February. “Due to asynchronous approvals, the United States was not allowed to export GE corn to be used for food and feed to South Africa. Imported grain from the United States can now make a difference in the food security status in southern Africa, which experienced the worst drought in history last year.”

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Milling industry depends on imports

In a presentation to the South African Grain Information Service (SAGIS) Wheat Forum in October 2016, Nico Hawkins, general manager, put the total number of wheat processing firms registered with SAGIS at 84. He put total flour milled in the year ended Aug. 31, 2016, at 3,151,986 tonnes.

“It varies between 3.2 (million tonnes) and 3.5 (million tonnes) a year,” Boikanyo Mokgatle, executive director of the National Chamber of Milling, told World Grain.

South Africa’s wheat processing industry depends on imports. Russia is by far the biggest source. According to Nico Hawkins’s presentation, total imports in the year ended Sept. 30, 2016, were 2,069,377 tonnes. Of the total, 46.54%, or 963,141 tonnes, came from Russia. Next was Germany, supplying 283,451 tonnes, or 13.7%, followed by the United States, which delivered 186,608 tonnes, or 9.02%.

Other big suppliers to South Africa were Poland, which supplied 185,036 tonnes, or 8.94%, and Lithuania, which supplied 151,014 tonnes, or 7.3%.

The customers for South Africa’s wheat exports are its neighbors, led by Zimbabwe, which imported 25,865, or 47.92%, of the total 53,974 tonnes exported by South Africa in the year ended Sept. 30, 2016. Next was Namibia, which took 13,481 tonnes, or 24.98%, of the total.

Mokgatle expressed concern at the level of dependence on imports.

“Our major issue in South Africa has been encouraging production,” he said. “We have not seen increased production as far as wheat is concerned. We have not been a net importer of wheat since the mid-1980s. With the recent weather conditions that we have experienced we have really been at a position where we have to import almost 60% of the local requirement. That is a situation that is leading us into what could possibly be dire straits. We, as an industry, need to change all that.

“We need to change the current circumstances and focus on issues of interacting with the industry at large. That would probably mean encouraging farmers to produce more. Then, at the same time, we need to know more in terms of what would encourage them to produce. There are a range of issues. We talk about maybe needing farmer support programs. We talk about the weather, which affects everybody around the world. We talk about the legislative framework. We talk about the trade policies. Basically it is a basket of each and every thing.”

Farmers have moved from wheat to more lucrative crops such as oilseeds.

South Africa wheat situation
Source: U.S. Department of Agriculture
“Farmers are business people,” he said. “If they can make more money planting oilseeds than wheat, then you can’t persuade them to plant wheat. As the wheat industry, and ourselves as the chamber of milling and as part of the entire industry chain, we have an interest to see production being resuscitated and accelerated so we don’t have to be dependent on imports.”

A recent attaché report expressed pessimism about South Africa’s chance of increasing wheat production.

“The declining trend in hectares planted with wheat will continue,” the attaché said, looking at 2016-17. “In addition, corn price levels are at record highs, which should motivate an increase in corn area planted rather than an increase in wheat area.”

Unless drastic technology changes occur that could improve wheat yields, the decreasing trend in hectares planted with wheat in South Africa will continue in the future, the attaché said.

In a report published in April 2016, the attaché looked at the growth in oilseeds production.

“Due to the demand pull from the investments that have grown the oilseed processing capacity in South Africa to 2.2 million tonnes, we believe the increasing trend in area planted with oilseeds before the drought will continue in 2016-17 under normal climatic conditions,” the report said. “However, record-high corn prices will lessen the increase in area planted with oilseeds, as producers will opt to plant more corn.”

The report predicted a 39% growth in soybean area in 2016-17, “due to the added soybean crushing capacity and the increased affinity by farmers to use soybeans as a rotational crop with corn.”

“South Africa invested an estimated R1 billion (U.S.$100 million) the past few years on expanding its soybean processing capacity to replace soybean meal imports,” the report said. “As a result, about 1.2 million tonnes of additional oilseed processing capacity has been created, bringing South Africa’s current total oilseed capacity to an estimated 2.2 million tonnes per annum.”

However, the increased attractiveness of corn to farmers was expected to lead to an 18% fall in sunflower area.