SA Grain June 2017

Junie 2017

Potential export market opportunities

for South African maize

frica’s largest maize producer is once again set to regain

its status as a net exporter of maize. South Africa, which

typically produces an average of 11 million tons of maize,

is expected to harvest over 14 million tons this year, recov-

ering from a two year long drought season.

The country’s maize production has generally increased over

the years. Contributing to that are good producer practices and

favourable weather conditions. An increase in production meant

that South Africa could increase its export capacity. Prior to the

drought, South Africa exported an average of 1,6 million tons,

with the largest export figure recorded in the 2011/2012 season at

2,8 million tons.

South Africa’s exports slowed during the drought season, result-

ing in the country to import maize for the first time since 2007/2008

season. In fact, South Africa’s maize imports for the 2016/2017

season reached its highest level, recorded at 2,2 million tons. Of

this total, 70% is yellow maize and 30% is white maize. Correspond-

ingly, production for the same period slowed to 7,8 million tons,

the lowest since the 2007/2008 season.

Despite the shortage seen in the past two seasons, South Africa

managed to export maize mainly to its neighbouring countries, ex-

porting more than 1 million tons in the 2016/2017 season. During a

good season, South Africa can better compete at deep sea level.

Below we shall look at South African exports over the past ten years

before the drought.

The top five importers of maize in 2014 consisted of three interna-

tional destinations: Taipei, Japan and South Korea, with only two

neighbouring countries, namely Botswana and Zimbabwe.

Over the ten year period (

Graph 1

), Zimbabwe is observed to be

the most consistent importer, with imports averaging 286 039 tons,

which makes up 19% of the average export market share and the

largest market share for the South African export market. Japan

only showed significant import quantities from 2010, with import

lags between 2007 and 2008.

South Korea has been showing volatility on the import quantity,

while for the past ten years, Taipei imports showed a positive in-

creasing trend of maize imports, except in 2012 when there was a

decline in imports.

Similarly, Botswana also showed an increasing trend in imports,

with its highest import intake amounting to 202 539 tons in 2012.

The leading import destination for maize exported in 2014 was

Taipei, importing 303 158 tons. Zimbabwe was the second largest

importer.

Graph 1 also depicts the trend of South African exports between

2005 and 2014. South African exports were the highest in the year

2011, with exports amounting to 2,8 million tons. The leading des-

tination for the 2011 exports was Mexico, which makes up 15% of

the South African export market, second largest from Zimbabwe.

Mexico imported just over 1 million tons, which was followed by

South Korea importing 725 382 tons of maize.

Over the ten year period, Kenya made up 10% of the export market,

which is the third largest market share. This was due to the 2009

Kenya imports which amounted to 1,1 million tons and relatively

their highest import intake, accounting 69% of South African

exports for that year. Generally, Kenya imports are relatively volatile,

averaging only 156 696 tons.

In the same period, Japan and South Korea respectively made up

8% and 9% of South Africa’s export market share.

Between 2013 and 2014, Mexico imports from South Africa dropp-

ed drastically. In fact, no imports are recorded for 2014. Mexico

imports declined from 919 568 in 2012 to 273 772 tons in 2013, indi-

cating a 70% year-on-year drop. In the same year, Mexico’s produc-

tion increased by 6% and Mexico imports from the world declined

by almost 50%.

In 2015, South African maize exports declined by 56% as a result

of the drought. The 2015/2016 maize production was down by 30%

from the previous season, at 9,9 million tons. Given the annual av-

erage consumption of 10,5 million tons, imports were required to

offset the domestic shortfall.

Looking at the seasonal data, we will now look at how South Africa’s

export market changed from a normal year to a drought stricken

season.

In the 2015/2016 season, South African exports amounted to

657 428 tons. Of this total, 72% is white maize and 30% is yellow

maize.

White maize

For the 2015/2016 season, white maize exports amounted to

473 427 tons (

Graph 2

). White maize was mainly exported to Bot-

swana, Lesotho, Namibia, Swaziland (the BLNS countries) and Zim-

babwe. Botswana was the largest importer of white maize at 33%,

followed by Namibia at 22%. Swaziland and Zimbabwe imported

least of the white maize crop, accounting 7% and 9%, respectively.

Yellow maize

For the 2015/2016 season, yellow maize exports amounted to

220 001 tons (

Graph 3

). South Africa exported to nine countries,

which was mainly to the neighbouring countries and to South Korea

and North Korea.

Once again, Botswana is seen as the largest importer of yellow

maize at 28%, followed by Swaziland and Namibia at 24% and 20%,

respectively. North Korea and South Korea imported the least yel-

low maize, each accounting 2% and 1% of the total of yellow maize

exported.

Total maize

From the analysed data, it is clear that the drought had a negative

impact on the export capacity of South African maize. South Afri-

ca could only export to its neighbouring countries, with the South

Korean exports declining to a low 2 277 tons. Losing market share

at deep sea level is concerning due to the fact that top importers

find new sources for their maize demand, such as Brazil or the USA.

ON FARM LEVEL

Export markets / Maize / Opportunities

Marketing

MICHELLE MOKONE,

agricultural economist: Grain SA