November 06, 2003



Review of South Africa's Wheat, Corn Production in 2003

Executive Summary


Both South Africa's 2003 wheat crop, planted earlier this year, and the corn crop, currently being planted, are facing drought stress.  After a long dry winter soil moisture levels are very low.  The summer rainfall season finally started in mid October but the rains were concentrated in the east and northwest.  The Free State basically did not receive much rain.  As a result most farmers in the eastern growing areas of Mpumalanga can plant while only some farmers in the northwest are able to start planting corn.  More rain is urgently needed.


The result is that the potential wheat crop is estimated 33% lower than in the previous season, partly also due to a decrease in the area planted.  At this stage the corn crop is down about 15% from what could be expected under normal conditions.  Rainfall over the next few weeks will, however, have a major effect on crop prospects. 


Wheat is already being imported with the full season imports expected to exceed 1 million tons while corn imports are expected to reach at least 500,000 tons in 2004.






The third official crop estimate of the 2003 wheat crop was released on October 20.  The estimate was decreased by 109,000 tons from the previous estimate to 1.565 million tons.  This is 756,000 tons or 33% lower than the previous crop.  The main production area is the Free State, with a production forecast of 552,500 tons or 35% of the crop, followed by the Western Cape with 520,000 tons or 33%.  The area planted estimate remained unchanged at 748,000 hectares.  The expected yield is 2.1 mt/ha. as against 2.5 mt/ha. for the previous season.  The decrease is due to low rainfall. Parts of the Western Cape, a winter rainfall area, had an unusually dry winter season.  In the Free State, a summer rainfall area, rain is urgently needed as the soil moisture is very low and as the wheat is now flowering, it is very sensitive to dry conditions. 


The production figures for previous seasons are based on actual deliveries and usually exceed the crop estimate.




Preliminary utilization figures for the October 2002/September 2003 season amounts to 2.627 million tons, compared to 2.606 million tons for 2001/2002.  Milling for human consumption amounted to 2.574 million tons compared to 2.518 million tons for the previous season, an increase of 2.2%.  A similar small increase in consumption is foreseen for 2003/04.




Imports for the October 02 to September 03 season amounted to 747,000 tons compared to the 407,000 tons imported in 2001/02.  In addition, imports for re-export reached 123,000 tons for total imports of 870,000 tons compared to a total of 563,000 tons for 2001/02.  The increased imports were, amongst others, due to cheap wheat being available in Eastern Europe.  Wheat from the US is currently reaching the market with sales reaching about 160,000 tons since June 2003.  Imports for the 2003/04 season are expected to exceed 1 million tons, with a considerable quantity sourced from the United States.


Exports for the season amounted to 177,000 tons compared to 149,000 tons for the previous season.  In addition 131,000 tons of imported stock were re-exported in 2002/03 compared to 171,000 tons in 2001/03.  Total exports thus amounted to 308,000 tons in 2002/03 compared to 320,000 tons in 2001/02.






At this stage the 2003 corn crop currently being planted is in trouble.  The October rainfall was going to be the deciding factor but it has been disappointing.  The eastern production area, mainly in the Mpumalanga province, got some general rain in the middle of the month but it has been dry since.  In the Northwest Province good rainfall was also reported but it has been dry in the Free State.  The optimum planting window in the Eastern area is mid October to mid November and planting is continuing.  Planting in the western areas can continue to mid December as the first date that frost can be expected determines planting times.  Frost is likely to occur earlier in the higher, colder, eastern areas limiting the length of the growing season.  Heavy general rain is urgently needed over the whole of the summer rainfall grain growing area, especially as soil moisture levels are very low after the long dry winter. 


The FAS 02 crop estimate is still subject to review with the commercial white corn crop likely to be increased to about 6.3 million tons and the yellow corn crop decreased to about 3.1 million tons for a total of about 9.4 million tons.  These adjustments are based on producer deliveries to date.  For our analysis, the total crop estimate is not as important as the actual deliveries to the silos. 


The FAS 03 forecast is preliminary and based on normal rainfall for the rest of the season.  It includes a 15% downwards adjustment of what would be expected under normal conditions, for damage already caused by the dry, hot weather.  These figures could change dramatically over the next few months.




Commercial deliveries, that is corn delivered to the silos according to SAGIS, forms the basis of the commercial PS&D.  Corn produced and consumed outside the formal trading environment is not well documented.  To correlate the commercial PS&D with a specific crop we use the March to February deliveries and not the formal May to April marketing year.  The reason is that the quantity of early deliveries has been increasing.  The March and April deliveries are then deducted from the May 1 carry over and added to the new season's deliveries.


The table is only a forecast of how the new season could develop.  Basically South Africa needs about 7.7 million tons for local use and about 1 million tons for exports into the region, for a total of 8.7 million tons.  With the more than 2 million ton carry over expected at the end of the current season, the need drops to 6.7 million tons.  About 1.7 million tons can be produced under irrigation, which cuts the amount needed from the dry land crop.  In the table above, where the commercial crop is forecast at 7.3 million tons, at least 500,000 tons of imports will be needed to maintain stock levels.



Source: USDA