08 May 2012
The long term trend in corn production indicates South Africa is producing more corn on less area. The
main reasons for this trend are more efficient and effective farming methods and practices, the use of
less marginal land in the corn production systems, better seed cultivars, the adoption of biotechnology
and the deregulation of the corn industry in the mid-nineties. As a result, the average corn yields almost
doubled in the past 15 years. Indications are that this trend of producing more corn on fewer hectares
will continue in future. Consequently, post forecasts that the area planted to corn later in 2012 for the
2012/13 MY (2013/14 MY for South Africa) will be around three million hectares. Commercial
farmers will plant about 2.5 million hectares and subsistence farmers 500,000 hectares. This will, based
on a national average yields, result in a crop of about 11.4 million tons.
The third estimate for the area planted and production of corn by commercial farmers for the 2011/12 MY (the 2012/13 MY in South Africa which runs from May 2012 to April 2013) was released by the CEC on April 24, 2012. The CEC dropped the South African commercial corn crop by almost two percent to 11.1 million tons. The main reason for the drop is that seasonal rainfall from October through February over the corn producing areas of South Africa was below average, despite expectations of above-average rainfall due to a La Niña year. Corn typically is planted from October through December in South Africa. In addition, an unexpected dry-spell from mid-February through early March impacted negatively on yields, and subsequently corn yields are less than last year.
However, despite the drought conditions, South Africa’s commercial farmers will produce seven percent more corn than in the 2010/11 MY due to a 14-percent increase in the planted area. According to the CEC, commercial farmers planted 2.7 million hectares of corn for the 2011/12 MY. Corn plantings were up in response to higher domestic corn prices during planting time (almost double) compared to the previous season. Domestic corn prices were up on the back of speculation that corn stock levels in South Africa are decreasing due to increased exports. Commercial farmers planted 1.6 million hectares with white corn, 15 percent more than the previous year, and 1.1 million hectares with yellow corn, 11 percent more than the previous year.
Post estimates that subsistence farmers planted about 500,000 hectares of corn and will produce 500,000 tons on corn. This means that South Africa’s total corn crop for the 2011/12 MY is estimated at 11.6 million tons on 3.2 million hectares, compared to the 10.9 million tons on 2.9 million hectares of the 2010/11 MY.
Since 2008, the human consumption of corn grew only by one percent per annum, while the demand for
animal feed corn grew by almost three percent per annum on the back of improved general economic
conditions which increased the demand for meat. However, slower growth for the South African
economy is predicted for the next two years, which will also slow down the demand for meat. South
Africa’s economy is expected to grow by 2.7 percent in 2012 and by 3.6 percent in 2013 due mainly to
the financial difficulties in Europe, South Africa’s biggest regional export market. As a result, post
forecasts that the demand for corn for human consumption will increase by one percent to 4.9 million
tons in the 2012/13 MY, while the demand for corn for animal feed purposes will increase by two
percent to 4.8 million tons. Hence, post predicts that the total domestic demand for corn will increase to
10.4 million tons in the 2012/13 MY.
For the 2011/12 MY, post estimates that commercial demand for corn for human consumption and animal feed purposes will remain basically flat from the previous season at 4.8 million tons and 4.7 million tons, respectively, due to relative high domestic corn prices which will dampen demand.
Total commercial corn consumption increased marginally in the 2010/11 MY to 10.1 million tons on economic growth of about three percent. The steady increase in the local corn price from June 2011 that reached record levels in January this year, which almost doubled the price levels from a year ago, dampened higher growth in corn demand. This increase in corn price was also channeled through to the consumer, where the increasing trend since January 2011 in the retail prices of corn meal, a staple food for many South Africans, are shown.
With an estimated total corn crop of 11.4 million tons, post forecasts that South Africa will be able to
export about 1.5 million tons of corn in the 2012/13 MY. Despite the unfavorable climatic conditions in
the 2011/12 MY, South Africa is expected to continue to be a net exporter of corn due to the increase of
hectares planted with corn. Post estimates that these exports will also be around 1.5 million tons.
For the 2010/11 MY, South Africa exported 2.4 million tons of corn which included 1.7 million tons of white corn and 710,334 tons of yellow corn (see also Table 4 below). Almost half of the corn exports (1.1 million tons of white corn) went to Mexico. Other major export destinations included Korea (302,259 tons of white corn and 45,234 tons of yellow corn), Taiwan (161,550 tons of yellow corn) and the countries neighboring South Africa (399,632 tons of white corn and 114,170 tons of yellow corn). South Africa imported 290,795 tons of yellow corn from Romania and Ukraine, which was mostly used at the coastal regions of the country. A small amount of white corn (114,500 tons) was also imported from Zambia and milled in the far northern parts of South Africa where there is especially a strong demand for corn meal from neighboring Zimbabwe. Total corn imports reached 405,295 tons in the 2010/11 MY.
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