Highlights

Post forecasts that a record area of 1.4 million hectares will be planted with oilseeds in South Africa in the 2017/18 MY. This is on the back of an expected record oilseed crop of 2.1 million tons in the 2016/17 MY, an increase of 42 percent from the 2015/16 MY drought reduced oilseed crop of 1.5 million tons. South Africa will crush record highs of almost 2.0 million tons of oilseeds in the 2016/17 MY and 2017/18 MY. As a result, imports of oilseed meal will drop to about 570,000 tons or 35 percent of local consumption in the 2017/18 MY, while the imports of soybean oil and sunflower seed oil will drop to 290,000 tons.

Executive Summary

Post forecasts that a record area of 1.4 million hectares will be planted with oilseeds in South Africa later in 2017, for the 2017/18 MY (marketing year starts March 1, 2018). An expected bumper corn crop in the 2016/17 MY and resulting lower local corn price levels will put downward pressure on the areas to be planted with corn later in 2017. Many of these unplanted corn areas will shift to oilseed plantings, especially to soybeans and sunflower. In addition, the areas under oilseeds have increased the past ten years, due to the demand pull from the investments that have grown the oilseed processing capacity in South Africa. Based on average yields, post forecasts that South Africa will produce 2.1 million tons of oilseeds for the 2017/18 MY.

A record oilseed crop of 2.1 million tons on 1.3 million hectares is expected in the 2016/17 MY. This represents an increase of 42 percent from the 2015/16 MY drought reduced oilseed crop of 1.5 million tons. Soybean production is expected to increase by 57 percent to 1.2 million tons. Sunflower seed production is estimated to increase by 19 percent to 896,060 tons, while peanuts production is expected to increase five-fold from 17,680 tons to 86,600 tons.

As a result, Post forecasts that South Africa will crush a record of 2.0 million tons of oilseeds in the 2017/18 MY. In the 2016/17 MY, Post estimates South Africa will crush 1.9 million tons of oilseeds on increased production and the expansion in crushing capacity.

For the 2016/17 MY, post predicts that the imports of soybean meal will decrease by eight percent to 580,000 tons, due to an increase in soybeans crushed on higher production. Post estimates that Sunflower meal imports will drop to about 10,000 tons from 93,000 tons imported in the previous marketing year. In the 2017/18 MY, post forecasts that soybean meal imports will drop even further to 570,000 tons as an record of 1.0 million tons of soybeans will be crushed locally. Sunflower meal imports are expected to drop to zero in the 2017/18 MY, while sunflower meal exports will grow to 30,000 tons.

For the 2016/17 MY, post expects oilseed oil imports to decrease by seven percent to 865,000 tons on higher local production. Post estimates South Africa will import about 90,000 tons of sunflower oil, 200,000 of soybean oil and 465,000 tons of palm oil. In the 2017/18 MY, oilseed oil imports should be on the same level as the 2016/17 MY, as the expected increase in local oilseed oil production equals the expected increase in consumption.

Total Oilseeds

Production

Post forecasts that a record area of 1.4 million hectares will be planted with oilseeds in South Africa later in 2017, for the 2017/18 MY (marketing year which starts on March 1, 2018). An expected bumper corn crop in the 2016/17 MY and resulting lower local corn price levels will put downward pressure on the areas to be planted with corn later in 2017. Post forecasts that around 2.4 million commercial hectares of corn will be planted later in 2017, which is nine percent less than the areas planted in the 2016/17 MY. Many of these unplanted corn areas will shift to oilseed plantings, especially to soybeans and sunflower.

In addition, the area under oilseeds has increase on average by more than 10 percent per annum the past ten years, due to the demand pull from the investments that have grown the oilseed processing capacity in South Africa. South Africa invested an estimated R1 billion (US$76 million) the past few years on expanding its soybean processing capacity to replace soybean meal imports. As a result, about 1.2 million tons of additional oilseed processing capacity has been created, bringing South Africa’s current total oilseed processing capacity to an estimated 2.2 million tons per annum.

Given the demand pull and less area under corn, Post forecasts a 13 percent growth in the areas planted with soybeans in the 2017/18 MY to 650,000 hectares. Post forecasts that sunflower seed areas planted will increase by ten percent to 700,000 hectares. Peanut planted areas will stay at its normal levels of around 55,000 hectares. Based on average yields, post forecasts that South Africa will produce 2.1 million tons of oilseeds for the 2017/18 MY.

The Crop Estimate Committee (CEC) released its second production estimate for the 2016/17 MY summer crops on March 28, 2017. A record oilseed crop of 2.1 million tons on 1.3 million hectares is expected. This represents an increase of 42 percent from the 2015/16 MY drought reduced oilseed crop of 1.5 million tons. The good rainfall between October and December of last year in many of the areas of South Africa that were affected by the severe drought the previous season was followed by even better rainfall in February. Many summer-producing areas in South Africa recorded far above average rainfall in February. As a result, the oilseed crop across South Africa is in a very good condition.

Soybean production is expected to increase by 57 percent to 1.2 million tons in the 2016/17 MY. Sunflower seed production is estimated to increase by 19 percent to 896,060 tons, while peanuts production is expected to increase five-fold from 17,680 tons to 86,600 tons.

Consumption

Post forecasts that a record of almost 2.0 million tons of oilseeds will be crushed in the 2017/18 MY on higher production. This is three percent higher than the 1.9 million tons that will be crushed in the 2016/17 MY. In the 2015/16 MY, South Africa only crushed 1.5 million tons of oilseed due to the drought.

Almost the entire local sunflower crop is destined for the processing industry for conversion to sunflower oil. The crushing capacity for sunflower seeds in South Africa is estimated at around one million tons per annum, while the capacity of oilseed refineries is estimated at 950,000 tons per annum. In years of lower sunflower production, the activities at crushing plants are reduced and the refineries import more crude oil, as it is more cost effective than importing sunflower seeds.

Sunflower meal, a by-product of the oil extraction process, is sold to local animal feed manufacturers. Sunflower meal is generally regarded as a low-value product that does not compare well to soybean meal in terms of nutritional value and fiber content. As a result, broiler rations cannot include more than seven percent sunflower meal. Hence, sunflower meal is mainly used as feed in the dairy and beef industries. With the increase in crushing capacity, South Africa crushed a record 988,000 tons of soybeans in the 2014/15 MY. Post estimates South Africa will crush new highs of 990,000 tons and 1.0 million tons of soybeans in the 2016/17 MY and 2017/18 MY, respectively. The local demand for soybean meal, as the preferred source of protein for animal feed, has increased in correlation with the increase in poultry production in South Africa and more than doubled over the past decade.

The domestic market is around 60,000 tons, with about 30,000 tons of peanuts being consumed in the direct edible market and just more than 30,000 tons for the peanut butter market. Post foresees a small growth in the peanut butter market in the next few years, due to new investments in a peanut shelling plant and subsequently a marketing plan to increase peanut butter consumption in South Africa.

Trade

Due to the drought, South Africa import 271,098 tons of soybeans, mainly from Paraguay, and 70,643 tons of sunflower seed, mainly from Bulgaria and Romania, to supplement local production in the 2015/16 MY. Post estimates that the imports of soybeans and sunflower seed should decline to zero in the 2016/17 MY and 2017/18 MY, due to the increase in local production.

In the 2015/16 MY, South Africa exported a small amount of 6,745 tons of soybeans to Mozambique and Zimbabwe. Exports of soybeans to South Africa’s neighboring countries are expected to grow to about 50,000 tons in the 2016/17 MY and 2017/18 MY.

Exports of peanuts reached about 8,408 tons in the 2015/16 MY, mainly to Japan and Mozambique. South Africa also imported 52,160 tons of peanuts in the 2015/16 MY, mainly from Argentina, to supplement local production that was impacted by the drought. Post estimates that South Africa’s peanut import will drop to about 10,000 tons in the 2016/17 MY and 2017/18 MY, on increased local production. On the other hand, peanut exports should recover to about 20,000 tons in the 2016/17 MY and 2017/18 MY.

Oilseed, Soybean

Market Begin Year

Mar 2016

Mar 2016

Mar 2017

South Africa

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Planted

515

515

565

575

0

650

Area Harvested

503

503

565

574

0

650

Beginning Stocks

311

311

142

331

0

293

Production

742

742

1070

1162

0

1100

MY Imports

275

271

250

0

0

0

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

1328

1324

1462

1493

0

1393

MY Exports

8

7

8

50

0

50

MY Exp. to EU

0

0

0

0

0

0

Crush

950

850

1000

990

0

1000

Food Use Dom. Cons.

28

24

28

25

0

25

Feed Waste Dom. Cons.

200

112

200

135

0

135

Total Dom. Cons.

1178

986

1228

1150

0

1160

Ending Stocks

142

331

226

293

0

183

Total Distribution

1328

1324

1462

1493

0

1393

Oilseed, Sunflower seed

Market Begin Year

Mar 2016

Marr 2016

Mar 2017

South Africa

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Planted

720

720

670

636

0

700

Area Harvested

719

719

670

636

0

700

Beginning Stocks

42

42

55

154

0

130

Production

755

755

800

896

0

930

MY Imports

50

71

40

0

0

0

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

30

68

30

0

0

0

Total Supply

847

868

895

1050

0

1060

MY Exports

1

0

1

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Crush

775

696

820

900

0

950

Food Use Dom. Cons.

1

1

1

2

0

2

Feed Waste Dom. Cons.

15

17

20

18

0

18

Total Dom. Cons.

791

714

841

920

0

970

Ending Stocks

55

154

53

130

0

90

Total Distribution

847

868

895

1050

0

1060

Oilseed, Peanut


Oilseed, Peanut

2015/2016

2016/2017

2017/2018

Market Begin Year

Mar 2016

Mar 2016

Mar 2017


USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Planted

25

25

55

53

0

55

Area Harvested

23

23

55

53

0

55

Beginning Stocks

28

28

18

25

0

31

Production

25

24

120

115

0

106

MY Imports

70

70

30

13

0

13

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

123

122

168

153

0

150

MY Exports

18

11

23

27

0

27

MY Exp. to EU

0

0

0

0

0

0

Crush

11

1

20

4

0

4

Food Use Dom. Cons.

72

80

75

84

0

89

Feed Waste Dom. Cons.

4

5

5

7

0

7

Total Dom. Cons.

87

86

100

95

0

100

Ending Stocks

18

25

45

31

0

23

Total Distribution

123

122

168

153

0

150

Total Meals

Production

Post forecasts that South Africa will crush a record of almost 2.0 million tons of oilseeds in the 2017/18 MY in line with increased production. In the 2016/17 MY, Post estimates South Africa will crush 1.9 million tons of oilseeds on increased production and the expansion in crushing capacity. In the 2015/16 MY, South Africa crushed 1.5 million tons of oilseeds, a decrease of ten percent from the previous year, due to the impact of the drought. South Africa crushed 696,000 tons of sunflower seed and 850,000 ton of soybeans in the 2015/16 MY. The production of soybean meal and sunflower meal in South Africa are indicated for the 2015/16 MY (actual), 2016/17 MY (estimate) and 2017/18 MY (forecast). Crushing yields used includes 42 percent meal for sunflower seeds and 80 percent meal for soybeans.

Consumption

South Africa’s consumption of sunflower meal and soybean meal dropped by four percent in the 2015/16 MY, due to the impact of the drought on local production and prices. Post expects meal consumption should recover in the 2016/17 MY to 1.6 million tons. Only marginal increase in meal consumption to 1.7 million tons is expected in the 2017/18 MY. South Africa’s economic growth is expected to continue to be sluggish in the next few years, due to structural and policy constraints, which will limit the increase in the demand for animal protein and hence animal feed.

Trade

In the 2017/18 MY, post forecasts that soybean meal imports will drop to 570,000 tons as an record of 1.0 million tons of soybeans will be crushed locally. Sunflower meal imports are expected to drop to zero in the 2017/18 MY, while sunflower meal exports will grow to 30,000 tons. For the 2016/17 MY, post predicts that the imports of soybean meal will decrease by eight percent to 580,000 tons, due to an increase in soybeans crushed on higher production. Post estimates that sunflower meal imports will drop to about 10,000 tons from the 93,000 tons imported in the previous marketing year. Imports of sunflower meal and soybean meal increased by 13 percent in the 2015/16 MY to 723,000 tons, due to the impact of the drought. Almost all imports of oilseed meal were imported from Argentina.

In the 2006/07 MY, more than 80 percent of the local consumption of oilseed meal was imported, while ten years later, in the 2016/17 MY, South Africa will only import about 36 percent of local oilseed meal consumption.

Meal, Soybean

Meal, Soybean


Meal, Soybean

2015/2016

2016/2017

2017/2018

Market Begin Year

Mar 2016

Mar 2016

Mar 2017

South Africa

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Crush

950

850

1000

990

0

1000

Extr. Rate, 999.9999

0.7895

0.8

0.789

0.8

0

0.8

Beginning Stocks

86

86

76

86

0

88

Production

750

680

789

792

0

800

MY Imports

660

630

625

580

0

570

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

1496

1396

1490

1458

0

1458

MY Exports

125

110

125

110

0

110

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

1295

1200

1300

1260

0

1280

Total Dom. Cons.

1295

1200

1300

1260

0

1280

Ending Stocks

76

86

65

88

0

68

Total Distribution

1496

1396

1490

1458

0

1458

Meal, Sunflower seed


Meal, Sunflower seed

2015/2016

2016/2017

2017/2018

Market Begin Year

Mar 2016

Mar 2017

Mar 2018

South Africa

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Crush

775

696

820

900

0

950

Extr. Rate, 999.9999

0.4258

0.4195

0.4268

0.42

0

0.4211

Beginning Stocks

18

18

18

18

0

21

Production

330

292

350

378

0

400

MY Imports

90

93

80

10

0

0

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

438

403

448

406

0

421

MY Exports

20

25

18

25

0

30

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

400

360

415

360

0

370

Total Dom. Cons.

400

360

415

360

0

370

Ending Stocks

18

18

15

21

0

21

Total Distribution

438

403

448

406

0

421

Total Oils

Production

Post estimates that South Africa will produce a record of 540,000 tons of oilseed oil in the 2017/18 MY. This is four percent more than the 520,000 tons of oil post estimates South Africa will produce in the 2016/17 MY. In the 2015/16 MY, South Africa produced 417,000 tons of oilseed oils, nine percent less than the previous year due to the drought. The production of soybean oil and sunflower oil in South Africa is indicated for the 2015/16 MY (actual), 2016/17 MY (estimate) and 2017/18 MY (forecast). Crushing yields used include 38 percent oil for sunflower seed and 18 percent oil for soybeans.

Consumption

South Africa consumes about1.2 million tons of vegetable and oilseed oil per annum. Most of the oilseed oil consumed in South Africa is palm oil which is mainly imported from Indonesia and Malaysia. South Africa also consumes about 300,000 tons of soybean oil and around 350,000 tons of sunflower seed oil, annually. The consumption of soybean oil, sunflower oil, palm oil and other vegetable oils in South Africa are illustrated for the 2015/16 MY (actual), 2016/17 MY (estimate) and 2017/18 MY (forecast). Post estimates that the consumption of oilseed oil will grow by only about two percent in the 2016/17 MY and by another two percent in 2017/18 MY. Economic growth is the main overall driver for the increase in the demand for oilseed oil and South Africa’s economic growth rates is expected to remain sluggish at less than two percent per annum in 2017 and 2018.

Trade

South Africa imported about 930,000 tons of vegetable and oilseed oil in the 2015/16 MY, 12 percent more than in the previous season. Major oils imported included palm oil (about 460,000 tons), soybean oil (about 215,000 tons) and sunflower oil (about 150,000 tons). Imported oil represented about 80 percent of local consumption in the 2015/16 MY.

For the 2016/17 MY, post expects oilseed oil imports to decrease by seven percent to 865,000 tons on higher local production. Post estimates South Africa will import about 90,000 tons of sunflower oil, 200,000 of soybean oil and 465,000 tons of palm oil. In the 2017/18 MY, oilseed oil imports should be on the same level as in the 2016/17 MY, as the expected increase in local oil production equals the expected increase in consumption.

South Africa also exports oilseed oils to neighboring countries and other countries in southern Africa, such as Zambia and Angola. In the 2015/16 MY, South Africa exported about 210,000 tons of oilseed oil, including 80,000 tons of sunflower seed oil, 70,000 tons of soybean oil and 18,000 tons of palm oil. These exports are expected to continue at the same level in the 2016/17 MY and 2017/18 MY.

Oil, Soybean


Oil, Soybean

2015/2016

2016/2017

2017/2018

Market Begin Year

Mar 2016

Mar 2016

Mar 2017

South Africa

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Crush

950

850

1000

990

0

1000

Extr. Rate, 999.9999

0.1832

0.18

0.183

0.1798

0

0.18

Beginning Stocks

35

35

34

33

0

31

Production

174

153

183

178

0

180

MY Imports

200

215

200

200

0

200

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

130

130

100

130

0

130

Total Supply

409

403

417

411

0

411

MY Exports

75

70

80

80

0

80

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

300

300

310

300

0

300

Feed Waste Dom. Cons.

0

0

0

0

0

0

Total Dom. Cons.

300

300

310

300

0

300

Ending Stocks

34

33

27

31

0

31

Total Distribution

409

403

417

411

0

411

Oil, Sunflower seed


Oil, Sunflower seed

2015/2016

2016/2017

2017/2018

Market Begin Year

Mar 2016

Mar 2016

Mar 2017

South Africa

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Crush

775

696

820

900

0

950

Extr. Rate, 999.9999

0.4194

0.3793

0.4183

0.38

0

0.3789

Beginning Stocks

45

45

20

44

0

46

Production

325

264

343

342

0

360

MY Imports

140

150

140

90

0

90

MY Imp. from U.S.

0

1

0

1

0

1

MY Imp. from EU

90

130

90

80

0

80

Total Supply

510

459

503

476

0

496

MY Exports

110

80

80

80

0

80

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

380

335

400

350

0

360

Feed Waste Dom. Cons.

0

0

0

0

0

0

Total Dom. Cons.

380

335

400

350

0

360

Ending Stocks

20

44

23

46

0

56

Total Distribution

510

459

503

476

0

496