November 3, 2015
Wheat production in South Africa to decrease 12%
Wheat production in South Africa during marketing year 2015-16 is estimated to reach 1.542 million tonnes, or 12% lower than the previous year's 1.750 million tonnes, according to the third forecast of South Africa's Crop Estimates Committee (CEC) released last week.
This, despite farmers planting 482,150 hectares of wheat, which is higher than the record low of 476,570 hectares planted in 2014-15.
The CEC forecast for wheat is contained in the GAIN [Global Agricultural Information Network] Report of the USDA Foreign Agricultural Service.
The report said the expected decrease in wheat production is mainly due to the drought condition in parts of the wheat-producing areas of Africa's most advanced economy. The forecast is lower than CEC's previous estimate of 1.665 million tonnes.
Wheat imports also to decrease
Wheat imports in 2015-16 is expected to also decrease by 5% to 1.700 million tonnes from the 1.785 million tonnes imported in the previous marketing year due to several factors including:
-- the increase in wheat import duty to a record level of R911.20 (US$68) per metric tonne, to protect local producers after the international wheat price dropped to the lowest level in five years.
-- the weakening of the South African rand by about 15% against the US dollar this year, increasing the wheat import tariff by 78% from the previous tariff of R510.60 ($38) a metric tonne.
-- the continuing poor economic growth outlook for South Africa.
According to the GAIN Report, South Africa also exports wheat to the Southern Africa region and acts as a conduit for imported grain.
In MY 2014-15, South Africa exported 275,059 tonnes to neighboring countries, up 8% from the previous year. Wheat exports in 2015-16 are expected to reach 300,000 tonnes, the report said.-Rick Alberto