SOUTH AFRICA – South Africa is expected to register its second largest corn crop output in history in the Marketing Year 2020/21, reaching 16.8 million tons.
The bumper out-put is set to put downward pressure on local corn prices, which will influence producers’ decisions on the area to be planted with corn later in 2021, for the 2021/22 MY.
Hence, a GAIN report by USDA, forecasts a nine percent drop in the commercial corn area to 2.5 million hectares, resulting in corn production of 15.0 million tons, which is 11 percent less than the expected corn crop of 2020/21 MY.
The decline will be registered after the estimated rise in corn production in 2020/2021 to 16.8 million tons, followed by 2019/20 MY’s corn crop of 15.8 million tons and 17.6 million tons of 2016/17.
Despite the expected decline in production, SADC region’s leading corn supplier is expected to remain a net exporter of the grain in 2021/22 as supplies will still exceed local demand.
According to the report, South Africa’s commercial corn demand is set at 11.6 million tons and 11.8 million tons for 2020/21 and 2021/22 marketing year respectively.
Local corn consumption in 2019/20 was 11.3 million tons, with 5.8 million tons utilized for human consumption and 5.5 million tonnes milled for animal feed.
From the surplus to be registered in the period under review, South Africa may export around 2.0 million tons of corn.
These exports will mainly be to South Africa’s established markets in neighbouring countries and deep-sea exports to Asia.
In the current season 2020/21, the country should be able to increase corn exports by almost 40 percent to 3.5 million tons.
As of the first eight weeks of the 2020/21, South Africa already exported 605,000 tons of corn.
This equates to an average of 75,000 tons of corn exports per week, compared to about 40,000 tons of corn exports per week during the same period in the 2019/20 MY.
Vietnam, Taiwan and Spain are currently the three major markets for South Africa’s corn.
South Africa searches for alternative corn market
In the 2018/19 MY and 2019/20 MY, Zimbabwe was South Africa’s main corn export market after the country lifted restrictions on the importation of Genetically Engineered (GE) corn late in 2019.
However, on May 21, 2021, the Zimbabwe’s Agricultural Marketing Authority announced that it stopped issuing import permits for corn and corn meal to local grain millers.
According to Zimbabwe’s Ministry of Agriculture, the import restrictions are necessary as the domestic corn crop reached 2.7 million tons, the largest crop since 1984. As a result, Zimbabwe will have the largest corn surplus in nearly three decades.
With Zimbabwe as a potential export market out of the picture, and various regional corn producing and consuming countries in the Southern Africa region, such as Malawi, Zambia, Tanzania, and Mozambique, also expecting larger crops, regional demand for corn is weaker than usual. As a result, South Africa is exploring other markets in the Far East, including Vietnam, Taiwan, Japan and South Korea.
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