February 13, 2006

Tighter corn supply in 2006 for South Africa

In USDA's latest report on South African grain and feed released on Feb 9, the corn crop planted in 2004 yielded 11.7 million tonnes, causing an oversupply and a dramatic fall in prices. This led to a voluntary 45 percent area cutback to 1.55 million hectares, the lowest in eighty years.

As the 2005 situation remains cloudy, USDA has not made any official estimates for the 2006 season. The cutback in the 2005 crop will lead to a tighter supply and increase demand for imports.

According to USDA, corn exports reached about 117,600 tonnes in January. Zimbabwe remains the main market, importing 59 percent of white corn in January.

As for wheat, the production estimate for the 2005 crop is 1.84 million tonnes, with expected yield reaching 2.3 tonne per hectare. The total area planted is 800,500 hectares.

The total area planted for wheat may increase to about 870,000 hectares, due to land being available from the cutback in area planted to corn. This could cause wheat production to rise to 2 million tonne.

For the full USDA report, click here.