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ON FARM LEVEL
South Africa’s soybean industry:
A brief overview
s
outh Africa has in recent years made significant invest-
ments in the domestic soybean crushing capacity. These
investments led to increases in the crushing capacity of
approximately 2,2 million tons plus.
Among others, investment towards soybean crushing
capacity was aimed at stimulating domestic soybean production,
as part of import substitution strategy. South African soybean pro-
ducers responded positively to these demand changes, and for the
first time the country’s production reached 1 million tons in the
2015/2016 marketing season.
Despite the increasing levels of soybean production, South Africa
still imports considerable volumes of soybean oilcake and oil, and
there is still considerable scope for production increases in order
to substitute these imports. In fact, South Africa’s domestic soy-
bean production is only a third of the country’s crushing capacity.
In the 2016/2017 marketing season, South Africa’s soybean pro-
duction is expected to decrease by 27% year-on-year, leaving room
for increases in oilcake and oil imports.
Moreover, the country is the largest importer of soybean oilcake in
Sub-Saharan Africa, accounting for an average of 72% of import
demand. According to the Protein Research Foundation, South
Africa’s soybean oilcake requirements in 2015/2016 will be
1,5 million tons, 55% of which would have to be imported.
Significant growth in oilcake and oil demand have been driven, to
a large extent, by increasing demand for animal feed, which in turn
has been stimulated by increases in the demand for high protein
food, more specifically within the growing middle class. In this arti-
cle, we briefly explore the soybean market structure by reflecting on
its production and trade trends.
Production perspective
Soybean is produced throughout the country, but significant pro-
duction takes place in the Free State and Mpumalanga provinces.
WANDILE SIHLOBO,
economist: Grain SA and
TINASHE KAPUYA
,
head: Trade and Investment, Agbiz
GRAIN MARKET
-overview
– 9 February 2016
Graph 1: South African soybean production.
Source: Grain SA (2016)
*1990/1991 - 1994/1995 = data limitations
YEAR
CAPACITY (TONS)
Crushing capacity in 2012
860 000
Estimated new crushing capacity in 2014
1 340 000
Estimated total capacity
+2 200 000
TABLE 1: SOUTH AFRICAN SOYBEAN CRUSHING CAPACITY.
Source: Protein Research Foundation and author’s deductions
Grain SA
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