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South Africa Corn and Wheat - Monthly Update 2004
USDA, March, 2004
South Africa’s, current, 2003 corn and wheat crops have both been damaged by drought. This was on top of severe cutbacks in the area planted mainly due to poor price prospects. The total area planted to corn dropped from 3.65 million hectares in 2002 to 3 million hectares in 2003. The 2003 crop is currently estimated at about 7 million tons, after 9.7 million tons were produced in 2002. A recent field trip in the company of a PECAD representative confirmed the general situation, although there is potential for the crop to increase after benefiting from February rains.

As a result of the smaller crop My2004/05 import needs are expected to jump to about 900,000 tons compared to the 200,000 tons estimated for the current season. The demand is for yellow corn, mainly from Argentina, which is able to comply with South Africa’s GMO requirements. For the 2004 crop to be planted from October this year, we see the area planted increase again to about 3.5 million hectares allowing a 9.3 million ton crop if weather conditions remain favorable. Because of the run down in stocks we still foresee a healthy import demand in 2005.

South Africa’s 2003 wheat crop is currently estimated at 1.4 million tons after 2.4 million tons were produced in 2002. The decrease is mainly due to a cutback in area planted, and a drop in average yield. South Africa took advantage of the market and imported 870,000 tons in 2002/03, which created a 900,000 tons carry over. The big carry over helped cut back 2003/04 import needs to 1.2 million tons. About 300,000 tons is re-exported annually. For the 2004 crop to be planted from May this year we foresee a return to a bigger area planted allowing for a much better crop. Imports will still stay high in 2005.

Corn Production

The first official estimate of South Africa’s 2003 corn crop was released on February 19, (2003 referring to the year of planting). The total crop is estimated at about 7 million tons, 27% less than the 9.7 million 2002 crop. The total area planted declined by 18% due to a combination of market and weather factors. As a result of a late start to the rainy season, and a December/January dry spell, the average yield is also expected to decline by about 12%. Since the estimate was made on February 19, rainfall has improved considerably and the eventual crop could be higher. At this stage the main concern is early frost as many fields were planted late.

The current, FAS 2002, My 2003/04, season is likely to end with a carry over in excess of 2 million tons at the end of April 2004. This will consist mainly of white corn (1.9 million tons) as the production trend has shifted to white corn which now constitutes about two thirds of the area planted.

The carry over improves the FAS 2003, My 2004/05 supply as more than enough white corn will be available to supply the human consumption needs of South Africa and its neighbors. Yellow corn is already in short supply and imports are expected to reach 200,000 tons in the current, 2003/04, season, and 900,000 tons in 2004/05. Although import decisions are dependent on local and international prices, the physical shortfall will have to be supplied.

Total exports for the 2003/04 marketing year are thus likely to reach 1.15 million tons, mainly white corn. About 430,000 tons will be going to the Customs Union partners, the so-called BLNS countries, and about 90,000 tons to Mozambique, for a total of about 520,000 tons. This is considered to be less than the quantity traditionally exported to these destinations. Sales to Zimbabwe are likely to exceed 400,000 tons this season, but this total includes some food aid including a donation by the South African government.

Potential exports of one million tons for My 2004/05 thus includes traditional BLNS and Mozambican sales of about 550,000 tons, and any other potential sales into the region. Domestic transport costs to the ports make large overseas shipments unlikely.

South Africa has been importing yellow corn from Argentina and 139,100 tons has been landed up to February 20. Total imports for the season may reach 200,000 tons.
This demand will escalate in My 2004/05 and could reach 900,000 tons. Fortunately the demand is spread over the whole season and importers can import sufficient quantities for coastal demand without encountering cross transport problems. This occurs when corn is shipped from inland silos to the coastal millers while imported corn is shipped inland.

Wheat Production

Although the final estimate of South Africa’s 2003 wheat crop is 1.428 million tons, deliveries to the silos amount to 1.443 million tons, which is used as production in the PS&D table. The 2004 crop, to be planted from May this year, is currently the main focus. Due to disappointing corn prices and the late start to the current summer rainfall season; about 700,000 hectares in the summer rainfall area were not planted in 2003. This includes a cutback in Free State wheat planting from 432,000 ha. in 2002 to 325,000 ha. in 2003. Recent rains have improved soil moisture levels and farmers are likely to increase the area planted to wheat again this year. For this reason we increased the area to be planted to 900,000 hectares and the crop to 2.25 million tons for 2004.

Consumption amounted to 2.606 million tons in 2001/02 and 2.638 million tons in 2002/03. Current indications are that the consumption rate has picked up since October 2003 and consumption for the year is estimated at 2.655 million tons, which could increase to 2.665 million tons in 2004/05.

South Africa acts as a conduit for wheat trade in the region.
At the current import rate of about 110,000 tons per month the expected seasonal total of 1.2 million tons can be achieved. To date the US has supplied 60% of the imports and if this continues US sales for the season could exceed 700,000 tons.
MGR Archive 16.3.2004
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