June 10, 2020


South Africa, Zambia await second-largest corn crop



South Africa and Zambia are both expecting their second-largest corn harvests on record, Business Live reported.


The South African government sees agriculture as a key sector for pushing growth and addressing unemployment, while increased agricultural exports are seen as a potential boost for local industry.


South Africa, Zambia, Zambia, Kenya, Zimbabwe, Malawi and Tanzania are among Africa's main corn producers.


According to the Agriculture Business Chamber (Agbiz), an organisation that represents commercial farmers and agribusiness, the expected harvest for the current production season in the case of South Africa is 15.6 million tonnes against domestic consumption of about 11 million tonnes.


In Zambia, the 2019/20 corn harvest is estimated at 3.4 million tonnes against domestic consumption of 2.2 million tonnes.


These figures mean South Africa could have at least 2.7 million tonnes of corn for export in the 2020/21 season, up 89% on-year, while Zambia could have one million tonnes for export, up from 100,000 tonnes the previous year. This would be the third year on record when Zambia could export one million tonnes of corn.


South Africa's corn exporters will be the biggest beneficiaries of a decision by the government of Zimbabwe to lift a ban on the importation or growing of genetically modified (GM) corn.


In January, Zimbabwe, in the middle of an economic collapse, lifted a ban on imports of genetically modified corn for the first time in 12 years as the country moves to tackle its worst famine.


Genetically modified corn is shunned across Sub-Saharan Africa, except by South Africa, amid concerns about how it might affect the health of the population.


In a market update on Monday, Wandile Sihlobo, head of agribusiness research at Agbiz, said the role of the South Africa and Zambian corn industries in the Southern and East African regions will remain significant in the 2020/21 marketing year which ends in April 2021.


Within the Southern Africa region, recent data released by Zimbabwe's ministry of lands and agriculture placed its 2019/20 corn harvest at 907,628 tonnes, up 17% from the previous season. However, this is below Zimbabwe's 10-year average corn production of 1.1 million tonnes and annual domestic consumption needs of 1.9 million tonnes to two million tonnes.


The 2019/20 production season corresponds with the 2020/21 marketing year, which means Zimbabwe will still need to import about one million tonnes of corn to fulfil its domestic needs within this marketing year, Sihlobo said.


Meanwhile, in East Africa, the International Grains Council forecasts Kenya's 2019/20 corn harvest at 3.4 million tonnes. This is roughly unchanged from the previous season though good rains fell over the past few weeks in the grain-producing regions of the country. With Kenya's annual corn consumption at about 4.7 million tonnes, the production estimate means the country may need to import about 1.3 million tonnes in the 2020/21 marketing year.


Sihlobo said biosecurity policy is always an important consideration within African markets. To this end, South Africa had in the past experienced phytosanitary barriers because of its use of genetically modified corn seeds. These account for about 80% of its output.


"But this time around things will be different. Zimbabwe lifted the ban on genetically modified maize [corn] imports 31 January 31 as the country attempted, then, to improve local supplies following a poor harvest in the 2018/19 season," Sihlobo said.


With the harvest for the 2019/20 season also likely to be low, this policy decision will help ease corn imports into Zimbabwe in coming months.


Sihlobo said in the case of Kenya a ban on the importation of genetically modified corn remains in place. This might limit SA's participation within Kenya, while Zambia, which produced non-genetically modified corn, might be a prominent player in the Kenyan market.


"SA's importance is likely to be within the Zimbabwean market. Ultimately, both SA and Zambia will be key sources of maize [corn] for the southern and east Africa region in the 2020/21 season," he said.