Grain and Feed Quarterly Update

An Expert's View about Cereals, Leguminous Crops, Oil Seeds in South Africa

Last updated: 19 Aug 2011

South Africa’s commercial corn crop for the 2011/12 marketing year (MY) is estimated at 10.855 million tons on 2.372 million hectares.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 7/27/2011 GAIN Report Number: South Africa - Republic of Grain and Feed Update Quarterly Update Approved By: Ross Kreamer Prepared By: Dirk Esterhuizen Report Highlights: South Africa?s commercial corn crop for the 2011/12 marketing year (MY) is estimated at 10.855 million tons on 2.372 million hectares. This is 15 percent less than the previous year?s crop of 12.815 million tons due to lower corn plantings. In total South Africa exported 2.067 million tons of corn in the 2010/11 MY. So far in the 2011/12 MY, South Africa already exported 644,289 tons of corn of which Mexico was the major importer with 341,148 tons of white corn. If corn exports continue at the current pace for the rest of the marketing year, South Africa can export almost three million tons of corn in the 2011/12 MY. With a carry-over stock of approximately five million tons and a current crop of around 11 million tons, South Africa has excess corn available to supply the global market. With the current drought in the Eastern Africa, South Africa is expected to become a major supplier of corn to these affected countries. Post: Pretoria Executive Summary: The sixth estimate for the area planted and production of corn in South Africa for the 2011/12 MY, was released by the Crop Estimate Committee (CEC) on July 26, 2011. According to the CEC, commercial farmers planted 2.372 million hectares of corn. This is 13 percent less than the corn hectares planted in the 2010/11 MY, in response to South Africa?s five million ton carry-over stock. Additionally, the CEC estimates the 2011/12 MY commercial corn crop at 10.855 million tons. This is 15 percent less than the previous year?s crop of 12.815 million tons due to lower corn plantings. The CEC estimates that subsistence farmers planted about 486,760 hectares of corn in the 2011/12MY which produced 564,335 tons of corn. This brings South Africa?s total estimated corn crop for the 2011/12 MY to 11.419 million tons. Total commercial corn consumption for the 2011/12 MY is estimated to be 9.82 million tons. Corn for human consumption is expected to remain flat due to higher prices, while corn for feed purposes is expected to increase by three percent on the back of better expected economic growth. For the first two and a half months of the 2011/12 MY, South Africa exported 644,289 tons of corn. If corn exports continue at this pace, South Africa will be able to export almost three million tons of corn in the 2011/12 MY. With a carry-over stock of approximately five million tons and a current crop of more than 11 million tons, South Africa has excess corn available to supply the global market. With the current drought in the Eastern Africa, South Africa is expected to become a major supplier of corn to these affected countries. US$1 = Rand 6.67 (07/27/2011) Sources: www.sagis.org.za www.grainsa.co.za www.safex.co.za www.daff.gov.za Corn Production Post forecasts that the area planted to corn later in 2011 for the marketing year that will start May 2012 and end April 2013 (2012/13 MY for South Africa and split year 2011/12 in the PS&D table) will be around three million hectares. Commercial farmers will plant about 2.5 million hectares on the back of higher corn prices and subsistence farmers 500,000 hectares. This will, on a national average yield, result in a crop of about 12.3 million tons. The sixth estimate for the area planted and production of corn by commercial farmers for the 2011/12 MY (May 2011 to April 2012 and split year 2010/11 in the PS&D table) was released by the CEC on July 26, 2011. According to the CEC, commercial farmers planted 2.372 million hectares of corn for the 2011/12 MY. This is 13 percent less than the corn hectares planted in the 2010/11 MY. The CEC estimates that subsistence farmers planted about 486,760 hectares of corn in the 2011/12MY, marginally less than the previous season. Commercial farmers planted 1.418 million hectares with white corn, 18 percent less than the previous year, and 954,000 hectares with yellow corn, seven percent less than the previous year. Corn plantings were down in response to South Africa?s four million ton corn surplus that developed after three excellent crop years in a row. The CEC estimates the 2011/12 MY commercial corn crop at 10.855 million tons. This is 15 percent less than the previous year?s crop of 12.815 million tons due to lower corn plantings. White corn is estimated at 6.302 million tons, 20 percent less than the previous season, while yellow corn is estimated at 4.553 million tons, nine percent less than the previous year. Furthermore, the CEC estimates that subsistence farmers produced 564,335 tons of corn for the 2011/12 MY, which brings South Africa?s total estimated corn crop for the 2011/12 MY at 11.419 million tons. This is marginally lower than post?s April estimate of 11.443 million tons due to the impact of flooding that occurred in corn producing area during harvest time. The following table details area planted and production figures of white and yellow commercial and subsistence corn for the 2010/11 (actual), 2011/12 (estimate) and 2012/13 (forecast) marketing years. Table 1: Area planted and production of commercial and subsistence corn in South Africa Area Yield Prod. Area Yield Prod. Area Yield Prod. 1,000ha t/ha 1,000 t 1,000ha t/ha 1,000 t 1,000ha t/ha 1,000 t MY 2010/11 2011/12 2012/13 Commercial corn White 1,720 4.5 7,830 1,418 4.4 6,302 1,400 4.5 6,330 Yellow 1,023 5.1 4,985 954 4.8 4,553 1,100 4.9 5,400 Sub Total 2,742 4.8 12,815 2,372 4.6 10,855 2,500 4.7 11,730 Subsistence corn White 372 1.1 422 347 1.1 396 350 1.1 390 Yellow 149 1.2 184 140 1.2 168 150 1.2 180 Sub Total 521 1.2 606 487 1.1 564 500 1.1 570 TOTAL 3,263 4.1 13,421 2,872 4.0 11,419 3,000 4.1 12,300 Source: SAGIS and CEC Consumption In the 2010/11 marketing season, South Africa?s corn consumption increased by nearly 3.5 percent to 9.65 million tons on the back of lower domestic corn prices. Human consumption of corn (mainly white corn) increased by almost one percent to 4.52 million tons while animal consumption of corn (mainly yellow corn) increased by more than four percent to 4.27 million tons. Total commercial corn consumption for the 2011/12 MY is estimated to be around 9.82 million tons. Corn for human consumption is expected to remain flat due to higher prices, while corn for feed purposes is expected to increase by three percent. As general economic conditions improve, middle- income consumers will consume more meat which will increase the demand for corn as the major animal feedstock. For the 2012/13 MY, Post forecasts that the trend of the previous season will continue with corn for human consumption to remain basically flat, while the demand for corn for animal feed purposes will increase by almost three percent to 4.5 million tons. As a result, the total domestic demand for corn will increase by two percent to 10 million tons in the 2012/13 MY. The following table outlines the commercial consumption for white and yellow corn for the 2010/11 (estimate), 2011/12 (estimate) and 2012/13 (forecast) marketing years. Please note that consumption figures in the PS&D table also include corn utilized by the subsistence farming sectors. Table 2: The commercial consumption of white and yellow corn in South Africa CORN White Yellow Total White Yellow Total White Yellow Total 1,000 t MY 2010/11 2011/12 2012/13 Human 4,159 356 4,515 4,200 350 4,550 4,250 350 4,600 Animal 1,658 2,613 4,271 500 3,890 4,390 500 4,000 4,500 Other 353 513 866 350 530 880 350 550 900 TOTAL 6,170 3,482 9,652 5,050 4,770 9,820 5,100 4,900 10,000 Source: SAGIS, Grain SA Trade For the first two and a half months of the 2011/12 MY, South Africa exported 644,289 tons of corn (see also Table 3). If corn exports continue at this pace, South Africa will be able to export almost three million tons of corn in the 2011/12 MY. With carry-over stocks of approximately five million tons and a current crop of more than 11 million tons, South Africa has excess corn available to supply the global market. So far in the 2011/12 MY, Mexico has emerged as South Africa?s major market with 341,148 tons of white corn imports. Mexico is followed by Korea (60,987 tons of yellow corn) and Taiwan (59,800 tons of yellow corn). However, with the current drought in the Eastern Africa, South Africa is expected to become a major supplier of corn to those countries. South Africa exported 2.067 million tons of corn in the 2010/11 MY, to 23 countries around the world, of which 1.049 million tons was white corn and 1.018 million tons yellow corn. The largest share was exported to Korea, which acquired 610,721 tons of yellow corn and 203,087 tons of white corn. Korea was followed by Botswana (175,103 tons) and Italy (131,107 tons). It was one of the few seasons where more than a million tons of yellow corn was exported, which illustrates South Africa?s ability to supply new markets with yellow corn outside its traditional white corn exports to African markets. Table 3: Export and Import Countries for white and yellow corn (1,000 tons) MY 2010/11 2011/12 (May 1, 2010 ? April 30, 2011) (May 1, 2011 ? July 15, 2011) White corn Yellow corn White corn Yellow corn Export Destinations Botswana 158 17 30 3 Cameroon 10 5 Chad 3 Ghana 7 Guinea 5 Iran Italy 131 33 Japan 98 Kenya 41 Korea 203 611 39 61 Kuwait 82 Lesotho 108 4 16 1 Mauritius 10 Madagascar 6 3 Malaysia Mexico 72 341 Mozambique 74 24 7 2 Namibia 80 20 5 3 Nigeria 13 Portugal 30 5 Senegal 2 4 3 Seychelles Somalia 27 20 Spain 26 Swaziland 55 55 1 9 Taiwan 51 60 Zimbabwe 37 TOTAL EXPORTS 1,049 1,018 492 152 Import Suppliers Brazil 0 0 0 0 TOTAL IMPORTS 0 0 0 0 Source: SAGIS Prices The South Africa Future Exchange (SAFEX) prices as of July 22, 2011, are shown in Table 4. Currently, white corn prices are at R1,842 per ton and yellow corn prices at R1,837 per ton, both trading at export parity levels. Since April 2011, local white corn prices have increased by 12 percent and yellow corn prices by 9 percent, and on a year-on-year basis local white corn prices increased by almost 70 percent and yellow corn prices by 62 percent. The upward movement in local corn prices follows the global trend of rising commodity prices, while increased exports of corn by South Africa also play a part in supporting higher domestic corn prices. Table 4: SAFEX prices for corn SAFEX Futures prices (as of 07/22/2011) Commodity 2011/08 2011/09 2011/12 2012/03 White corn R1,842/t R1,863/t R1,914/t R1,935/t ($247/t) ($251/t) ($256/t) ($264/t) Yellow corn R1,837/t R1,853/t R1,890/t R1,911/t ($255/t) ($259/t) ($264/t) ($271/t) PS&D Table Corn South Africa 2009/2010 2010/2011 2011/2012 Market Year Begin: May 2010 Market Year Begin: May 2011 Market Year Begin: May 2012 USDA Official New Post USDA Official New Post USDA Official New Post Area Planted 3,263 3,263 2,900 2,872 3,000 3,000 Beginning Stocks 4,113 4,113 5,169 5,206 4,594 3,246 Production 13,420 13,420 12,000 11,420 12,500 12,300 MY Imports 0 0 25 0 25 0 TY Imports 27 0 25 0 25 TY Imp. from U.S. 0 0 0 0 0 0 Total Supply 17,533 17,533 17,194 16,626 17,119 15,546 MY Exports 2,064 2,067 2,000 3,000 2,000 2,000 TY Exports 1,586 1,586 2,200 1,500 2,000 1,500 Feed and Residual 4,600 4,560 4,800 4,670 4,900 4,790 FSI Consumption 5,700 5,700 5,800 5,710 5,900 5,780 Total Consumption 10,300 10,260 10,600 10,380 10,800 10,570 Ending Stocks 5,169 5,206 4,594 3,246 4,319 2,976 Total Distribution 17,533 17,533 17,194 16,626 17,119 15,546 1000 HA, 1000 MT, MT/HA
Posted: 17 August 2011, last updated 19 August 2011

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