Report Highlights: 

Post forecasts that South Africa will plant around 3.2 million hectares of corn in the 2014/15 MY, which could realize a total corn crop of about 13.0 million tons. South Africa’s corn crop for the 2013/14 MY, at 14.6 million tons, is 17 percent more than the 2012/13 MY’s corn crop of 12.5 million tons and the largest since the 1980/81 MY. As a result, South Africa should have sufficient stocks to export about 3.5 million tons of corn in the 2013/14 MY and 2.5 million tons of corn in the 2014/15 MY.

Executive Summary 

Post forecasts that the area planted with corn later in 2014, for the 2014/15 MY, will be around 3.2 million hectares. Based on national average yields, an area of 3.2 million hectares could realize a total corn crop (commercial and subsistence producers) of about 13.0 million tons. 

Since the beginning of February, the corn producing areas in South Africa, especially the western side, received particularly good rains. As a result, the 2013/14 MY corn crop will be the biggest since the 1980/81 MY, yielding 14.6 million tons, 17 percent more than the 2012/13 MY’s corn crop of 12.5 million tons. 

For the 2014/15 MY, post estimates that South Africa will have sufficient stocks to export about 2.5 million tons of corn, as commercial production is expected to exceed 12.0 million tons. For the 2013/14 MY, post estimates that South Africa will export around 3.5 million tons of corn as commercial production is estimated at almost 13.9 million tons. The 2012/13 MY corn export figures have been finalized. According to the South African Grain Information Services (Sagis), South Africa exported almost 2.1 million tons of corn of which 1.1 million tons were yellow corn and 926,000 tons were white corn. 

CORN 

Production 

Post forecasts that the area planted with corn later in 2014, for the 2014/15 MY, will be around 3.2 million hectares. Commercial farmers will plant about 2.7 million hectares and subsistence farmers 500,000 hectares. This forecast is based on the average hectares planted with corn in the past five years in South Africa. Based on national average yields, an area of 3.2 million hectares could realize a total corn crop of about 13.0 million tons. 

Since the beginning of February, the corn producing areas, especially the western side, received particularly good rains and as a result, the 2013/14 MY corn crop will be the largest in South Africa since the 1980/81 MY. The fifth production forecast for corn by the Crop Estimates Committee (CEC) on June 26, 2014, estimates the 2013/14 MY commercial corn crop at 13.9 million tons on 2.7 million hectares. Post estimates the subsistence corn crop at 700,000 tons on 500,000 hectares, setting South Africa’s total corn crop for the 2013/14 MY at 14.6 million tons, 17 percent more than the 2012/13 MY’s corn crop of 12.5 million tons. 

Total white corn production is estimated at 8.2 million tons, 35 percent higher than the previous season, while total yellow corn production is estimated at 6.4 million tons, which is at the same level as in the 2012/13 MY. 

In May 2014, the CEC revised the 2012/13 MY corn crop upwards by one percent to 11.8 million tons. The main reason for the upwards revision was that actual corn deliveries between November, 2013 and February, 2014 were higher than the projected figures. As a result, post also revised its production figures upwards for the 2012/13 MY. 

Consumption 

The commercial demand for corn for food increased on average by two percent per year for the past 15 years, while the commercial demand for feed corn increased on average by three percent per year. Post projects that this marginal increases in demand will continue in the 2014/15 MY, with corn demand expected to reach 10.6 million tons in the 2014/15 MY. 

Post estimates that the commercial demand for corn will increase by about five percent in the 2013/14 MY to 10.3 million, due to lower corn price compared to the previous season, which will increase corn demand. However, a higher percentage increase in demand is restricted by poor economic growth estimates. The South African economy is expected to grow by only 1.7 percent in 2014 and by 2.9 percent in 2015, due to labor unrest and strikes, upward inflationary pressures and electricity constraints. Post estimates that South Africa will use 4.8 million tons of corn for human consumption and 4.9 million tons of corn for animal feed in the 2013/14 MY. 

The commercial consumption for corn in the 2012/13 MY, was finalized at 9.8 million tons, two percent more than the previous year and in line with post’s previous estimate. According to Sagis, 4.9 million tons of both white corn and yellow corn were consumed, while 4.6 million tons of corn were used for human consumption and 4.7 million of corn for animal feed. 

Trade 

For the 2014/15 MY, post estimates that South Africa will have sufficient stocks to export about 2.5 million tons of corn, as commercial production is expected to exceed 12.0 million tons. 

For the 2013/14 MY, post estimates that South Africa will export around 3.5 million tons of corn on a commercial production estimate of 13.9 million tons and increased corn price competitiveness in the world market, due to a weakening R/US$ exchange rate and a 50 percent decrease in local corn prices the past six months. The rand already lost more than 20 percent of its value since the beginning of 2013, due to South Africa’s labor unrests and expectations are that this trend will continue. The Department of Agricultural, Forestry and Fisheries (DAFF) already issued permits for the exporting of corn containing Genetically Modified Organisms, of more than two million tons in the past three months. Permits were issued mainly for corn exports to Japan (510,000 tons), Korea (550,000 tons) and Taiwan (one million tons). So far in the 2013/14 MY, South Africa has already exported 474,000 tons of mainly yellow corn. 

The 2012/13 MY corn export and import figures have been finalized. According to Sagis, South Africa exported almost 2.1 million tons of corn of which 1.1 million tons were yellow corn and 926,000 tons were white corn. Japan (596,315 tons of yellow corn), Zimbabwe (257,594 tons of white corn and 29,219 tons of yellow corn) and Botswana (165,789 tons of white corn and 46,694 tons of yellow corn) were the top three markets. Other deep sea markets included Mexico (190,097 tons of white corn), Taiwan (166,360 tons of yellow corn) and Korea (148,044 tons of yellow corn). About 80,000 tons of yellow corn were imported from the Ukraine at the beginning of the year, to augment stock levels before the harvesting of the 2013/14 MY crop started. 

Prices 

Both white corn and yellow corn prices fell back from their record high levels early this year as prices moved from import parity levels to export parity levels. Corn prices are almost 50 percent lower than six months ago as stock levels have recovered and exports have resumed after the harvesting of the largest corn crop the past 33 years in South Africa. On a year-on-year basis, white corn and yellow corn prices are 28 percent and 21 percent lower, respectively. Post foresees that local corn prices will stay close to export parity levels for the remainder of this calendar year