April 6, 2004

South Africa Corn Crop Seen At 7.7 Million MT

South Africa's 2003 corn crop currently maturing is estimated at 7.7 million tons, about 2 million tons less than the previous crop. The decrease is due mainly to a market-related cutback in area planted. With a 2 million ton-plus carry over from the current season, the crop should be able to supply domestic needs and allow about one million tons of white corn exports. Yellow corn is in short supply and imports are likely to reach 700,000 tons in My04/05. Wheat production is expected to increase this year but import demand will stay high, according to a U.S. Department of Agriculture Foreign Agriculture Service agricultural attach¨¦.
 
SUMMARY
 
South Africa's 2003 corn crop is officially estimated at about 7.7 million tons compared to the 9.7 million tons produced in the previous season. The decline is mainly due to an 18% cutback in area planted brought about by poor price expectations. The rainy season usually starts in October and goes through April. In some areas the rainfall season started late and was followed by a December dry spell. Rainfall then improved in the first quarter of 2004.
 
At this stage the crop estimate may be optimistic and 7.5 million tons may be a better indication of the current status of the crop. Bolstered by an expected carry over of about 2.3 million tons at the end of April this year, supplies will however be sufficient to supply domestic needs of about 8.6 million tons and allow exports of about one million tons of white corn. Due to an anomaly in the product mix, yellow corn is in short supply. Imports are likely to reach about 400,000 tons in the current season and 700,000 tons in My04/05.
 
Indications are that wheat plantings from May this year will rebound to about 850,000 hectares after only 750,000 hectares were planted in 2003. This could produce a crop of about 1.95 million tons after only 1.47 million tons were produced this year. Import demand will however stay high with My 2003/04 imports expected to reach 1.2 million tons and My 2004/05 demand about 900,000 tons. Exports and re-exports generally amount to more than 300,000 tons. This report also looks at the total cereals trade including rice.
 
CEREALS
 
Trade
 
South Africa's 2003 calendar year trade data compiled by the South African Revenue Service was released recently. The data is for the Southern African Customs Union, including South Africa and the BLNS countries, Botswana, Lesotho, Namibia and Swaziland. It shows that the region's grain trade balance is negative, with imports exceeding exports. Weekly import and export data for both wheat and corn are available on the South African Grain Information Service (SAGIS) website, www.sagis.org.za
 
Exports
 
Corn is the main export outside the Southern African Region. Sales to the BLNS countries are not shown. Some of the exports recorded are re-exports moving through the South African transport system. It is noticeable that with the advent of the free market system regional exports increased and unprofitable overseas exports diminished.
 
Production
 
The second official estimate of South Africa's 2003 corn crop was released on March 19, 2004 (2003 referring to the year of planting). The total crop is estimated at about 7.7 million tons, 21% less than the 9.7 million 2002 crop. The total area planted declined by 17.6% 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 4%. Since the first estimate was made on February 19, rainfall has improved considerably and the second estimate shows an increase of 650,000 tons, or 9% on the initial estimate. At this stage the main concern is early frost as many fields were planted late.
 
The crop in the developing sector is still estimated at about 224,000 tons compared to 286,000 tons last season. The commercial crop estimate is the important factor in the supply and distribution. The 17% or 540,000 ha. decline in area planted compared to the previous season obviously had the major effect on the potential crop, as the average yield expected only decreased by 4.4%. The decision to cut back the planted area was mainly a marketing decision based on poor price expectations although the late rains in some areas strengthened this position.
 
The expected average yields do not reflect the hot and dry weather suffered earlier in the season, which affected the early plantings. Late plantings constitutes a big portion of the crop and a high percentage of the crop is still maturing. The latest 2003 estimate shows that the expected yields in Mpumalanga are actually better than last season. As expected, yields in the other two main production areas of the Free State and the North-West Province, are expected to decline.
 
Consumption
 
Commercial deliveries, that is corn delivered to the silos according to the South African Grain Information Service (SAGIS), forms the basis of the commercial supply and distribution. The quantity of corn produced and consumed outside the formal trading environment is small and estimated as actual figures similar to the delivery figures does not exist. This amounted to the crop in the developing sector, 286,000 tons and commercial farm retentions, 425,000 tons, to total 711,000 tons in My 03/04 and an expected 624,000 tons in My 04/05, or less than 9% of the total consumption. It includes corn eaten fresh, used for silage, used for on farm feeding, or fields not harvested but grazed.
 
To correlate the commercial S&D with a specific crop we use the March to February deliveries and not the formal May to April marketing year. The March and April deliveries are then deducted from the May 1 carry over and added to the new season's deliveries.
 
Trade
 
The corn exports shown in the trade matrix are from the South African Revenue Service (SARS) as used by the World Trade Atlas but are for the customs union excluding sales to the BLNS countries as reported before. The SAGIS figures contain all exports and by simple deduction we can calculate sales to the BLNS countries. SAGIS now publishes exports by destination and as soon as we have a full year's data we will be able to test the hypotheses. The high figures for 2000 and 2001 probably included quantities going to Zimbabwe and Zambia through Botswana.
 
Production
 
A survey undertaken by the Dept. of Agriculture at the end of February gives an early indication of 2004 planting intentions for wheat. The survey shows that producers intend to increase the area planted by 103,200 ha. (13.8%), to 851,200 hectares. The main areas are: the Free State, with 378,000 ha. (44.4%), followed by the Western Cape with 352,000 ha. (41.4%). The area under irrigation is estimated at 12%. The 851,000 ha. is likely to produce a crop of about 1.95 million tons under normal conditions. The survey was done before recent good rains improved soil moisture conditions in the Free State. This could lead to a further increase in the area planted. The final estimate of the 2003 crop was 1.443 million tons but deliveries has surpassed this and the final figure is likely to reach about 1.473 million tons.
 
Trade
 
South Africa imports wheat and exports wheat and flour. In addition, there are imports for neighboring countries moving trough the local infrastructure. Both the weekly and monthly imports and exports are available on the SAGIs website.

 
Source: USDA