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ON GROUND LEVEL
10
Desember 2015
Supply and demand scenarios for
South Africa’s maize market:
WANDILE SIHLOBO,
economist: Grain SA and
TINASHE KAPUYA
,
head: Trade and Investment, Agbiz
GRAIN MARKET
-overview
– 13 November 2015
Looking into the 2015/2016 a d 2016/2017 marketing years
I
n 2014, South Africa exported 2,1 million tons of maize
which translated to R6,5 billion in export revenue (ITC, 2015).
However, South frica will not achieve comparable export
revenues in the 2014/2015 production year due to unfavour-
able weather conditions.
South Africa will for the first time in seven years be a net importer
of maize. Grain SA estimates this season’s imports at 770 000 tons,
compared to 83 073 tons the previous season. The high level
if imports in the current marketing year will cost an estimated
± R2,2 billion.
At the time of writing, 62% of the 770 000 ton requirement had
already been imported. In this article, we briefly explore Grain SA’s
scenarios for the 2016/2017 marketing year.
Historic exports in perspective
South Africa is a net maize exporting market. In 2014, about 26% of
South African maize exports went to Taiwan,
followed by Zimbabwe, which accounted for
14% of South Africa’s export share. Japan,
Botswana and South Korea each accounted
for 7% of South Africa’s 2014 total maize ex-
ports.
Namibia, Mozambique, Lesotho, Swaziland
and Italy were also amongst the top ten
export markets with shares ranging be-
tween 3% and 6% of South Africa’s total
export revenue.
Graph 1
illustrates South Africa’s maize ex-
port earnings over the past ten years. The
highest export earnings were recorded in
2013, at R7,3 billion, on the back of exports
which were at 2,6 million tons (ITC, 2015).
Looking into the 2015/2016
and 2016/2017 marketing
years
The 2015/2016 drought is said to be the
worst since 1992 and shifted the domes-
tic maize market into a net import situ-
ation. Grain SA estimates that white maize imports might reach
70 000 tons, while yellow maize imports might reach 700 000 tons.
At the same time, South Africa’s exports to regional markets within
the Southern African Customs Union (SACU) are expected to reach
630 000 tons this season.
The continuing heatwave and drought have become a major cause
for concern throughout the country. The worrying weather condi-
tions have led to reluctance by producers to plant maize and the total
area for planting maize is expected to decrease by 4% year-on-year
to 2,55 million hectares.
Against this background, Grain SA has quantified three possible sce-
narios for the 2016/2017 marketing year and these are presented on
Table 1, Table 2
and
Table 3
. It is important to emphasise that all
scenarios are based on the intended planting area of 2,55 million
hectares, which might change as the season unfolds and new data
and insights come into the market.
Graph 1: South Africa’s maize in rand value.
Source: International Trade Centre (2015)