Required Report - public distribution

**Date:** 1/31/2008

**GAIN Report Number:** SF8001

SF8001

**South Africa, Republic of**

**Grain and Feed**

**Quarterly Update**

**2008**

**Approved by:**

![](media/image1.wmf)Scott Sindelar

U.S. Embassy, Pretoria

**Prepared by:**

Dirk Esterhuizen

**Report Highlights:**

The National Department of Agriculture released its final official
figure for the 2007/08 marketing year corn crop. The size of the total
corn crop has been set at 7.125 million tons with 4.315 million tons of
white corn and 2.810 million tons of yellow corn. Approximately 1.525
million tons of corn, mainly yellow corn, will need to be imported. For
the 2008/09 marketing year it is estimated that 2.786 million hectares
of corn were planted, which is 9.2% more than the 2.552 million hectares
planted for the previous season. The continuous good rains across the
corn producing areas of South Africa are extremely favourable for this
year's corn crop and there are already speculations of a corn crop
exceeding 11 million tons.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Quarterly Report

Pretoria \[SF1\]

\[SF\]

**Executive Summary**

The size of the commercial corn crop available for the 2007/08 marketing
year has been set at 7.125 million tons. The white corn crop was
finalized at 4.315 million tons on 1.625 million hectares which is only
2% less than the previous year. The yellow corn crop was finalized at
2.810 million tons on 927 000 hectares which is 22% more than the
previous season. With a local demand of approximately 8.880 million tons
of corn, it is estimated that about 1.525 million tons of corn, mainly
yellow corn, will need to be imported. As of January 18, 2008, 1.028
million tons of yellow corn has already been imported from Argentina.
The white corn supply should be sufficient to service the local demand,
mainly because of a carry-over-stock of 1.630 million tons

For the 2008/09 marketing year it is estimated that 2.786 million
hectares of corn were planted, which is 9.2% more than the previous
season. The continuous good rains across the corn producing areas of
South Africa are extremely favourable for this year's corn crop, and a
corn crop exceeding 11 million tons is a good possibility.

US\$1 = Rand 7.0 (01/25/08)

Sources:

[**www.sagis.org.za**](http://www.sagis.org.za/)

[**www.grainsa.co.za**](http://www.grainsa.co.za/)

[**www.safex.co.za**](http://www.safex.co.za/)

# Production

The National Department of Agriculture released its final official
figure for the 2007/08 marketing year corn crop on November 29, 2007.
The size of the commercial corn crop available for the 2007/08 marketing
year has been set at 7.125 million tons. The estimated total production
figures from the Crop Estimates Committee (CEC) were revised, using the
actual deliveries data of the South Africa Grain Information Service and
the figures from a maize utilization survey which determined on-farm
usage and retentions. Comparing the re-calculated crop figures with the
numbers set by the CEC on August 28, 2007, the CEC under-estimated the
commercial corn crop by only 3.1%. The aim of the CEC is to set the
final estimate within 5% of the final calculated crop. The area planted
figures were not adjusted.

The white corn crop was finalized at 4.315 million tons on 1.625 million
hectares which is only 2% less than the previous year. The yellow corn
crop was finalized at 2.810 million tons on 927,000 hectares which is
22% more than the previous season. The following table contains area
planted and production figures of white and yellow corn for the 2005/06,
2006/07 and 2007/08 marketing years.

<table>
<colgroup>
<col style="width: 13%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td>CORN</td>
<td><p>Area</p>
<p>000ha</p></td>
<td><p>Yield</p>
<p>t/ha</p></td>
<td><p>Prod.</p>
<p>000 t</p></td>
<td><p>Area</p>
<p>000ha</p></td>
<td><p>Yield</p>
<p>t/ha</p></td>
<td><p>Prod.</p>
<p>000 t</p></td>
<td><p>Area</p>
<p>000ha</p></td>
<td><p>Yield</p>
<p>t/ha</p></td>
<td><p>Prod.</p>
<p>000 t</p></td>
</tr>
<tr class="even">
<td><strong>Marketing year</strong></td>
<td><strong>2005/06</strong></td>
<td></td>
<td></td>
<td><strong>2006/07</strong></td>
<td></td>
<td></td>
<td><strong>2007/08</strong></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>White</td>
<td>1.700</td>
<td>3.6</td>
<td>6.108</td>
<td>1.033</td>
<td>4.3</td>
<td>4.392</td>
<td>1.625</td>
<td>2.6</td>
<td>4.315</td>
</tr>
<tr class="even">
<td>Yellow</td>
<td>1.110</td>
<td>3.6</td>
<td>3.947</td>
<td>567</td>
<td>4.1</td>
<td>2.315</td>
<td>927</td>
<td>3.0</td>
<td>2.810</td>
</tr>
<tr class="odd">
<td>TOTAL</td>
<td>2.810</td>
<td>3.6</td>
<td>10.055</td>
<td>1.600</td>
<td>4.2</td>
<td>6.707</td>
<td>2.552</td>
<td>2.8</td>
<td>7.125</td>
</tr>
</tbody>
</table>

The following graph gives an indication of how the first forecast to the
final estimate deviated from the final crop during the 2007 production
season.

The first estimate on the area planted with corn for the 2008/09
marketing year was released on January 24, 2008. It is estimated that
2.786 million hectares of corn were planted, which is 9.2% more than the
2.552 million hectares planted for the previous season. The area
estimate for white corn is 1.714 million hectares, which represents an
increase of 5.5% from the previous season. The area estimate for yellow
corn is 1.072 million hectares, which is 15.6% more than the 927,000 ha
planted last season.

The area estimate for sunflower seed is 482,250 hectares, which is 52.4%
more than the 316,350 hectares planted the previous season. It is
estimated that 165,000 ha have been planted to soybeans, which
represents a decrease of 9.8% compared to the 183,000 ha planted last
season. For groundnuts the area estimate is 47,100 hectares which is
15.5% more than the 40,770 hectares planted for the previous season. The
area estimate for sorghum increased by 19.1%, from 69,000 hectares to
82,200 hectares against the previous season.

The continuous good rains across the corn producing areas of South
Africa are extremely favorable for this year's corn crop. There are
already speculations of a corn crop exceeding 11 million tons.

## 

# Consumption

For the 2007/08 marketing season approximately 4.020 million tons of
corn, mainly white corn, will be used for human consumption and
approximately 4.250 million tons, mainly yellow corn will be used for
feed consumption.

The following table contains the actual commercial consumption of white
and yellow corn:

<table>
<colgroup>
<col style="width: 13%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td><p>CORN</p>
<p>000 t</p></td>
<td>White</td>
<td>Yellow</td>
<td>Total</td>
<td>White</td>
<td>Yellow</td>
<td>Total</td>
<td>White</td>
<td>Yellow</td>
<td>Total</td>
</tr>
<tr class="even">
<td><strong>Marketing year</strong></td>
<td><strong>2005/06</strong></td>
<td></td>
<td></td>
<td><strong>2006/07</strong></td>
<td></td>
<td></td>
<td><strong>2007/08</strong></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>Human</td>
<td>3.731</td>
<td>266</td>
<td>3.997</td>
<td>3.718</td>
<td>290</td>
<td>4.008</td>
<td>3.750</td>
<td>270</td>
<td>4.020</td>
</tr>
<tr class="even">
<td>Animal</td>
<td>543</td>
<td>3.468</td>
<td>4.011</td>
<td>787</td>
<td>3.260</td>
<td>4.047</td>
<td>850</td>
<td>3.400</td>
<td>4.250</td>
</tr>
<tr class="odd">
<td>Other</td>
<td>91</td>
<td>49</td>
<td>140</td>
<td>78</td>
<td>6</td>
<td>84</td>
<td>185</td>
<td>425</td>
<td>610</td>
</tr>
<tr class="even">
<td>TOTAL</td>
<td>4.365</td>
<td>3.783</td>
<td>8.148</td>
<td>4.583</td>
<td>3.556</td>
<td>8.139</td>
<td>4.785</td>
<td>4.095</td>
<td>8.880</td>
</tr>
</tbody>
</table>

With the exclusion of corn as feedstock for ethanol production in the
new Bio-fuels Industrial Strategy, approved by the South African
Government (Government) on December 5, 2007 (see also SF7044), the hope
for an additional outlet for corn in a \"fairly stagnant\" domestic
market was crumbled. Corn as a feedstock for ethanol production was
excluded amid concerns about food security and fears of price increases.
The new strategy recommends sugar cane and sugar beet for bio-ethanol
production and soy beans, canola and sunflower as feedstock for
biodiesel. The Government has indicated that up to 3 million hectares of
arable farm land will be made available to emerging farmers for
production of bio-fuels feedstock. This has been described by the
Government as a major step in the process of social development in rural
South Africa.

# Trade

In the marketing year ended April 2007 approximately 931 000 tons of
yellow corn were imported from Argentina. Corn exports, mainly white
corn, for the same period amounted to approximately 548 000 tons. It is
estimated that for this marketing year (May 2007 -- April 2008)
approximately 1.525 million tons of corn, mainly yellow corn, will need
to be imported. The carry-over-stock of yellow corn is relatively small
at approximately 440 000 tons. As of January 18, 2008, 1.028 million
tons of yellow corn has already been imported from Argentina. The white
corn supply should be sufficient to service the local demand, mainly
because of a carry-over-stock of 1.630 million tons.

The following table shows the different export and import countries for
white and yellow corn for marketing years 2005/06, 2006/07 and 2007/08.
For 2007/08 the actual figures from May 2007 to January 18, 2008 are
shown.

+------------+--------+--------+--------+--------+--------+--------+
| *          | **20   |        | **200  |        | **200  |        |
| *Marketing | 05/06\ |        | 6/07** |        | 7/08** |        |
| year**     | (May - |        |        |        |        |        |
|            | Ap     |        | **     |        | **(May |        |
|            | ril)** |        | (May - |        | --     |        |
|            |        |        | Ap     |        | Janu   |        |
|            |        |        | ril)** |        | ary)** |        |
+------------+--------+--------+--------+--------+--------+--------+
|            | *      | **     | *      | **     | *      | **     |
|            | *White | Yellow | *White | Yellow | *White | Yellow |
|            | corn** | corn** | corn** | corn** | corn** | corn** |
+------------+--------+--------+--------+--------+--------+--------+
| **Exports  | '000   |        |        |        |        |        |
| C          | tons   |        |        |        |        |        |
| ountries** |        |        |        |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
| Angola     | 14     |        | 4      |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
| Benin      | 2      |        |        |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
| Botswana   | 176    | 21     | 118    | 13     | 80     | 2      |
+------------+--------+--------+--------+--------+--------+--------+
| Cameroon   | 3      |        |        |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
| Der        | 10     |        | 9      |        |        |        |
| -es-Salaam |        |        |        |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
| Ghana      | 8      |        |        |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
| Indonesia  |        | 50     |        |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
| Japan      |        | 113    |        |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
| Kenya      | 40     |        | 3      |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
| Lesotho    | 83     | 4      | 73     | 6      | 51     | 8      |
+------------+--------+--------+--------+--------+--------+--------+
| Madagascar | 1      |        | 1      |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
| Malawi     | 68     |        |        |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
| Mali       | 2      |        |        |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
| Mexico     |        |        | 27     |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
| Mozambique | 139    | 11     | 43     |        | 31     |        |
+------------+--------+--------+--------+--------+--------+--------+
| Namibia    | 54     | 17     | 51     | 16     | 30     | 13     |
+------------+--------+--------+--------+--------+--------+--------+
| Sudan      | 28     |        |        |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
| Swaziland  | 26     | 35     | 18     | 52     | 25     | 32     |
+------------+--------+--------+--------+--------+--------+--------+
| Somalia    | 3      |        |        |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
| Zambia     | 89     |        |        |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
| Zimbabwe   | 1.035  | 11     | 111    |        | 5      | 2      |
+------------+--------+--------+--------+--------+--------+--------+
| **TOTAL    | **1    | *      | *      | **88** | *      | **55** |
| EXPORTS**  | .781** | *356** | *459** |        | *222** |        |
+------------+--------+--------+--------+--------+--------+--------+
| **Import   |        |        |        |        |        |        |
| C          |        |        |        |        |        |        |
| ountries** |        |        |        |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
| Argentina  |        | 361    |        | 931    |        | 1.028  |
+------------+--------+--------+--------+--------+--------+--------+
| Zambia     |        |        |        |        | 21     |        |
+------------+--------+--------+--------+--------+--------+--------+
| Malawi     |        |        |        |        | 1      |        |
+------------+--------+--------+--------+--------+--------+--------+
| Tanzania   |        |        |        |        | 3      |        |
+------------+--------+--------+--------+--------+--------+--------+
| **TOTAL    |        | *      |        | *      | **25** | **1    |
| IMPORTS**  |        | *361** |        | *931** |        | .028** |
+------------+--------+--------+--------+--------+--------+--------+

**Prices**

The SAFEX prices as of 01/25/2008 are shown in the following Table.
Local prices for the current crop remain high, at levels around
R1750/ton, due to the shortage in local supply and high international
prices. Prices for the new corn crop are currently trading at lower
levels of around R1500/ton due to expectations that the local crop will
exceed 11 million tons.

+------------+----------+----------+----------+----------+----------+
|            | ### S    |          |          |          |          |
|            | AFEX Fut |          |          |          |          |
|            | ures pri |          |          |          |          |
|            | ces (01/ |          |          |          |          |
|            | 25/2008) |          |          |          |          |
+------------+----------+----------+----------+----------+----------+
| **C        | **2      | **2      | **2      | **2      | **2      |
| ommodity** | 008/03** | 008/05** | 008/07** | 008/09** | 008/12** |
+------------+----------+----------+----------+----------+----------+
| White corn | R1747/t  | R1510/t  | R1478/t  | R1511/t  | R1558/t  |
|            |          |          |          |          |          |
|            | (        | (        | (        | (        | (        |
|            | \$250/t) | \$216/t) | \$211/t) | \$216/t) | \$223/t) |
+------------+----------+----------+----------+----------+----------+
| Yellow     | R1901/t  | R1555/t  | R1547/t  | R1577/t  | R1629/t  |
| corn       |          |          |          |          |          |
|            | (        | (        | (        | (        | (        |
|            | \$272/t) | \$222/t) | \$221/t) | \$225/t) | \$233/t) |
+------------+----------+----------+----------+----------+----------+

  --------------- ---------- ---------- ----------- -- ---------- -- -- ---------- ----------- ---------- ---------- -- -----------
  **PSD Table**                                                                                                         

  **Country**     **South                                                                                               
                  Africa**                                                                                              

  **Commodity**   **Corn**                                                                                              

  1000HA, 1000MT  2005       Revised                   2006             Estimate               2007       Forecast      

                  USDA\      Post\      Post\          USDA\            Post\      Post\       USDA\      Post\         Post\
                  Official   Estimate   Estimate\      Official         Estimate   Estimate\   Official   Estimate      Estimate\
                                        New                                        New                                  New

  **Market Year              05/2006    05/2006                         05/2007    05/2007                05/2008       05/2008
  Begin**                                                                                                               

  Area Harvested  2032       2032       2032           2900             2897       2552        3200       3300          2786

  Beginning       3190       3190       3190           2308             2000       2308        2008       175           1578
  Stocks                                                                                                                

  Production      6935       6935       6935           7300             6500       7125        10000      11000         11144

  MY Imports      931        915        931            1500             1000       1525        250        250           250

  TY Imports      896        896        896            996              1050       996         900        0             900

  TY Imp. from    36         36         36             0                0          0           0          0             0
  U.S.                                                                                                                  

  Total Supply    11056      11040      11056          11108            9500       10958       12258      11425         12972

  MY Exports      548        540        548            500              525        500         800        550           3000

  TY Exports      1406       1406       1406           431              500        431         800        0             800

  Feed            4000       4150       4000           4400             4300       4250        4800       4350          4350
  Consumption                                                                                                           

  FSI Consumption 4200       4350       4200           4200             4500       4630        4400       4550          4600

  Total           8200       8500       8200           8600             8800       8880        9200       8900          8950
  Consumption                                                                                                           

  Ending Stocks   2308       2000       2308           2008             175        1578        2258       1975          1022

  Total           11056      11040      11056          11108            9500       10958       12258      11425         12972
  Distribution                                                                                                          
  --------------- ---------- ---------- ----------- -- ---------- -- -- ---------- ----------- ---------- ---------- -- -----------