Required Report - public distribution

**Date:** 2/18/2005

**GAIN Report Number:** SF5004

SF5004

**South Africa, Republic of**

**Grain and Feed**

**Annual**

**2005**

**Approved by:**

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

U.S. Embassy, South Africa

**Prepared by:**

Herman Germishuis

**Report Highlights:**

The South African corn farmer has basically produced himself out of a
market, the March 2005 price for white corn is currently R528
(\$88)/ton. The price has dropped about 50% since November 2004 due to
high stocks and the prospects of a big crop. The crop planted in 2004 is
estimated at 9.7 million tons to which a carry over of about 3 million
tons must be added. Consumption is about 8.7 million tons and export
prospects poor resulting in the price collapse. The 2004 wheat crop is
estimated at 1.73 million tons while domestic and regional demand
amounts to 3.1 million tons necessitating imports of about 1.1 million
tons. With no domestic rice production imports continue to exceed
700,000 tons per year.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Pretoria \[SF1\]

\[SF\]

**Table of contents:**

Summary page 2

Corn 3

Production 3

Consumption 5

Stocks 7

Prices 7

Trade 8

Marketing 10

Feed 10

Wheat 12

Production 12

Consumption 12

Trade 13

Rice 16

**Summary:**

South African corn production mainly exceeded domestic demand over the
past ten seasons. This was mainly due to favorable weather as the area
planted was cut back. The crop planted in 2004 is estimated at 9.7
million tons and the forecast for the crop to be planted later in 2005
is 9 million tons. Total domestic demand is about 8.7 million tons.
Carry over stocks built up over time and coupled with the good crops,
let to a collapse in producer prices. With export demand limited and
consumption static, prospects for the industry are clouded. The strong
SA Rand also pushes down the price of imports. Farmers have thus asked
for higher import tariffs.

The wheat industry is in the same boat but a drought in some areas and
chronic low prices has seen production drop well under consumption
needs. Imports during the current 2004/05 season are expected to reach
1.1 million tons after 1.3 million tons were imported in 2003/04.

Rice is imported, as there is no domestic production. Annual imports
exceed 700,000 tons but the US portion of the trade is diminishing as a
result of price competition from the Far East.

US\$1=Rand 6.00 on 02/18/2005.

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

[www.grainsa.co.za]{.underline}

[www.safex.co.za]{.underline}

[www.fews.net]{.underline}

[www.wfp.org]{.underline}

[www.grains.org](http://www.grains.org/)

[www.weathersa.co.za](http://www.weathersa.co.za/)

[www.sadc-fanr.org.zw](http://www.sadc-fanr.org.zw/)

www.afma.co.za

###### CORN

+------------------+--------+------+--------+------+--------+------+
| **PSD Table**    |        |      |        |      |        |      |
+------------------+--------+------+--------+------+--------+------+
| **Country**      | **S    | ##   |        |      |        |      |
|                  | outh** | #### |        |      |        |      |
|                  |        | # Af |        |      |        |      |
|                  |        | rica |        |      |        |      |
+------------------+--------+------+--------+------+--------+------+
| **Commodity**    | **     |      |        |      |        |      |
|                  | Corn** |      |        |      |        |      |
+------------------+--------+------+--------+------+--------+------+
| 1000 ha.         | 2003   | Rev  | 2004   | Esti | 2005   | Fore |
|                  |        | ised |        | mate |        | cast |
+------------------+--------+------+--------+------+--------+------+
| 1000 mt.         | USDA   | Post | USDA   | Post | USDA   | Post |
|                  | Of     | \[N  | Of     | \[N  | Of     | \[N  |
|                  | ficial | ew\] | ficial | ew\] | ficial | ew\] |
+------------------+--------+------+--------+------+--------+------+
| **Market Year    |        | 05/  |        | 05/  |        | 05/  |
| Begin**          |        | 2004 |        | 2005 |        | 2006 |
+------------------+--------+------+--------+------+--------+------+
| Area Harvested   | 3300   | 3205 | 3500   | 3240 | 0      | 3100 |
+------------------+--------+------+--------+------+--------+------+
| Beginning Stocks | 2443   | 2420 | 2943   | 3035 | 3193   | 3435 |
+------------------+--------+------+--------+------+--------+------+
| Production       | 9700   | 9710 | 9700   | 9700 | 0      | 9000 |
+------------------+--------+------+--------+------+--------+------+
| TOTAL Mkt. Yr.   | 300    | 220  | 250    | 200  | 0      | 200  |
| Imports          |        |      |        |      |        |      |
+------------------+--------+------+--------+------+--------+------+
| Oct-Sep Imports  | 495    | 553  | 200    | 200  | 0      | 200  |
+------------------+--------+------+--------+------+--------+------+
| Oct-Sep Import   | 61     | 62   | 0      | 10   | 0      | 0    |
| U.S.             |        |      |        |      |        |      |
+------------------+--------+------+--------+------+--------+------+
| TOTAL SUPPLY     | 12443  | 1    | 12893  | 1    | 3193   | 1    |
|                  |        | 2350 |        | 2935 |        | 2635 |
+------------------+--------+------+--------+------+--------+------+
| TOTAL Mkt. Yr.   | 800    | 650  | 1000   | 800  | 0      | 850  |
| Exports          |        |      |        |      |        |      |
+------------------+--------+------+--------+------+--------+------+
| Oct-Sep Exports  | 797    | 449  | 1000   | 500  | 0      | 600  |
+------------------+--------+------+--------+------+--------+------+
| Feed Dom.        | 4100   | 4025 | 4100   | 4050 | 0      | 4075 |
| Consumption      |        |      |        |      |        |      |
+------------------+--------+------+--------+------+--------+------+
| TOTAL Dom.       | 8700   | 8665 | 8700   | 8700 | 0      | 8750 |
| Consumption      |        |      |        |      |        |      |
+------------------+--------+------+--------+------+--------+------+
| Ending Stocks    | 2943   | 3035 | 3193   | 3435 | 0      | 3035 |
+------------------+--------+------+--------+------+--------+------+
| TOTAL            | 12443  | 1    | 12893  | 1    | 0      | 1    |
| DISTRIBUTION     |        | 2350 |        | 2935 |        | 2635 |
+------------------+--------+------+--------+------+--------+------+

######## Production

According to the Crop Estimates Committee, the preliminary estimate of
the 2004 area planted to corn by commercial farmers is 2.9 million
hectares, 1.8% up from the 2.8 million hectares planted in 2003. The
ratio of white to yellow corn plantings is 63:37 in comparison to the
previous season's 65:35. The expected white corn plantings are 1.8
million ha, down 0.6% on the previous season's plantings while yellow
corn plantings are 1.07 million ha, up 6.4% from 2003. The following
table contains the area planted details plus a forecast of the 2004 crop
compared to the 2003 situation:

+----------+--------+--------+---------+--------+--------+---------+
| CORN     | R      | Yield  | Revised | Est    | Yield  | Pro     |
|          | evised |        | pro     | imated | fo     | duction |
|          | Area   | M      | duction |        | recast | f       |
|          |        | t./ha. |         | Area   |        | orecast |
|          | 1000   |        | 1000    | 1000   | M      | 1000    |
|          | ha.    |        | mt.     | ha.    | t./ha. | mt.     |
+----------+--------+--------+---------+--------+--------+---------+
| Co       | FAS    |        | My      | FAS    |        | My      |
| mmercial | 03\*   |        | 04/05   | 04\*   |        | 05/06   |
+----------+--------+--------+---------+--------+--------+---------+
| White    | 1842   | 3.15   | 5805    | 1830   | 3.1    | 5675    |
+----------+--------+--------+---------+--------+--------+---------+
| Yellow   | 1001   | 3.67   | 3677    | 1065   | 3.4    | 3825    |
+----------+--------+--------+---------+--------+--------+---------+
| Total    | 2843   | 3.34   | 9482    | 2895   | 3.28   | 9500    |
+----------+--------+--------+---------+--------+--------+---------+
| De       |        |        |         |        |        |         |
| veloping |        |        |         |        |        |         |
+----------+--------+--------+---------+--------+--------+---------+
| White    | 282    | 0.61   | 171     | 2      | 0.56   | 150     |
|          |        |        |         | 70\*\* |        |         |
+----------+--------+--------+---------+--------+--------+---------+
| Yellow   | 79     | 0.72   | 57      | 75\*\* | 0.67   | 50      |
+----------+--------+--------+---------+--------+--------+---------+
| Total    | 361    | 0.63   | 228     | 3      | 0.58   | 200     |
|          |        |        |         | 45\*\* |        |         |
+----------+--------+--------+---------+--------+--------+---------+
| Total    |        |        |         |        |        |         |
| corn     |        |        |         |        |        |         |
+----------+--------+--------+---------+--------+--------+---------+
| White    | 2124   | 2.81   | 5976    | 2100   | 2.77   | 5825    |
+----------+--------+--------+---------+--------+--------+---------+
| Yellow   | 1080   | 3.46   | 3734    | 1140   | 3.40   | 3875    |
+----------+--------+--------+---------+--------+--------+---------+
| Grand    | 3204   | 3.03   | 9710    | 3240   | 2.99   | 9700    |
| total    |        |        |         |        |        |         |
+----------+--------+--------+---------+--------+--------+---------+

\* Denotes year of planting

\*\* Attaché estimate

To forecast the 2005 crop at this stage is difficult as the 2004 crop is
by no means in the bag and the traditional dry spell in February and
March could still devastate the current crop. The stock situation and
the resultant producer price expectations for the 2005 season will have
a major effect on the area to be planted later in 2005. As will be shown
in the consumption and price sections South Africa is currently
suffering from a surplus and thus very low prices.

Further cutbacks in area planted can be expected if the oversupply
continues. The 99/03 five-year average data is most important, as recent
yields are now more important and historical yields no longer relevant
under current conditions. The area under corn has been cut back by about
a third since market deregulation, implying that only higher quality
land is now being planted to corn. The smaller area planted allows
optimum use of inputs and improved varieties leading to better yields.
Because of the smaller area planted, the 170,000 to 200,000 hectares
grown under irrigation plays a more important role in total yield.

The following table compares the 2004 commercial crop estimate and the
2005 forecast with the 1999/2003 five year average situation.

  ----------------- ----------------- ----------------- -----------------
  Commercial crop   Area              Yield             Production

                    '000 hectares     Mt./ha.           '000 mt.

  FAS 99/03 average                                     

  White corn        1900              3.0               5800

  Yellow corn       1100              3.4               3700

  Total             3000              3.2               9500

  FAS 2004 estimate                                     

  White             1830              3.1               5675

  Yellow            1065              3.4               3825

  Total             2895              3.3               9500

  FAS 2005 forecast                                     

  White             1750              3.0               5250

  Yellow            1050              3.4               3550

  Total             2800              3.1               8800
  ----------------- ----------------- ----------------- -----------------

The SAFEX futures prices for March 2005 white corn dropped from
R1,071/ton at the beginning of November 2004 to R551/ton on January 25,
2005. The dramatic 49% drop in prices over three months is a catastrophe
for producers and endangers the future of the industry. The price drop
is the cumulative effect of chronic overproduction, static consumption,
and slow export sales leading to high carry over stocks. The strong SA
Rand and the weak US Dollar aggravate the situation as import parity
prices (about R955/ton F.O.R. Durban) are low and export parity prices
(R375/ton ex Durban) even lower. The following table gives one view of
the industry's average margins per hectare over the past few seasons.

+-----------+-----------+-----------+-----------+-----------+-----------+
| FAS       | Ave.      | Yield     | Input     | Income    | Margin    |
| year\*    | prod.     |           | costs     | per       | per       |
|           | Price     | Mt./ha.   |           |           |           |
|           | R/mt.     |           | per ha.   | ha. R.    | ha. R.    |
|           |           |           | R.        |           |           |
+-----------+-----------+-----------+-----------+-----------+-----------+
| 2000      | 1216      | 2.9       | 2175      | 3526      | +1351     |
+-----------+-----------+-----------+-----------+-----------+-----------+
| 2001      | 1450      | 3.2       | 3161      | 4640      | +1479     |
+-----------+-----------+-----------+-----------+-----------+-----------+
| 2002      | 898       | 3.0       | 3382      | 2694      | -688      |
+-----------+-----------+-----------+-----------+-----------+-----------+
| 2003      | 806\*\*   | 3.3       | 3447      | 2660      | -787      |
+-----------+-----------+-----------+-----------+-----------+-----------+

\* Year of planting

\*\* May 04/ Jan. 05

######## Consumption

Commercial deliveries, that is corn delivered to the silos according to
the South African Grain Information Service (SAGIS), forms the basis of
the commercial supply and distribution. To correlate the commercial S&D
with a specific crop we use the March to February deliveries and not the
formal May to April marketing year. The

March and April deliveries are then added to the new season's deliveries
and deducted from the May 1 carry over. Imports for re-exports, and the
relevant stocks, are incorporated in the figures. The latest commercial
PS&D's are summarized below:

+-----------------+-----------------+-----------------+----------------+
| FAS 2003        | # My 2004/05    | #               |                |
| estimate        |                 |  Commercial S&D |                |
|                 | # May/April     |                 |                |
+-----------------+-----------------+-----------------+----------------+
| '000 Metric     | White           | Yellow          | Total          |
| tons            |                 |                 |                |
+-----------------+-----------------+-----------------+----------------+
| B/Stocks        | 2030            | 390             | 2420           |
+-----------------+-----------------+-----------------+----------------+
| Adjusted crop   | 5805            | 3675            | 9480           |
| est.            |                 |                 |                |
+-----------------+-----------------+-----------------+----------------+
| Farm retentions | 110             | 300             | 410            |
+-----------------+-----------------+-----------------+----------------+
| Delivery        | 5695            | 3375            | 9070           |
| forecast        |                 |                 |                |
+-----------------+-----------------+-----------------+----------------+
| Imports         | 0               | 220             | 220            |
+-----------------+-----------------+-----------------+----------------+
| Total supply    | 7725            | 3985            | 11710          |
+-----------------+-----------------+-----------------+----------------+
| Exports         | 600             | 50              | 650            |
+-----------------+-----------------+-----------------+----------------+
| Dom.            | 4515            | 3510            | 8025           |
| Consumption     |                 |                 |                |
+-----------------+-----------------+-----------------+----------------+
| Ending stocks   | 2610            | 425             | 3035           |
+-----------------+-----------------+-----------------+----------------+

+-----------------+-----------------+-----------------+----------------+
| FAS 2004        | # MY 2005/06    | #               |                |
|                 |                 |  Commercial S&D |                |
| # forecast      | # May/April     |                 |                |
+-----------------+-----------------+-----------------+----------------+
| '000 Metric     | White           | Yellow          | Total          |
| tons            |                 |                 |                |
+-----------------+-----------------+-----------------+----------------+
| B/Stocks        | 2610            | 425             | 3035           |
+-----------------+-----------------+-----------------+----------------+
| Comm.crop       | 5675            | 3825            | 9500           |
+-----------------+-----------------+-----------------+----------------+
| Farm retentions | 100             | 300             | 400            |
+-----------------+-----------------+-----------------+----------------+
| Delivery        | 5575            | 3525            | 9100           |
| forecast        |                 |                 |                |
+-----------------+-----------------+-----------------+----------------+
| Imports         | 0               | 200             | 200            |
+-----------------+-----------------+-----------------+----------------+
| Total supply    | 8185            | 4150            | 12335          |
+-----------------+-----------------+-----------------+----------------+
| Exports         | 750             | 50              | 800            |
+-----------------+-----------------+-----------------+----------------+
| Dom.            | 4550            | 3550            | 8100           |
| Consumption     |                 |                 |                |
+-----------------+-----------------+-----------------+----------------+
| Ending stocks   | 2885            | 550             | 3435           |
+-----------------+-----------------+-----------------+----------------+

+-----------------+-----------------+-----------------+-----------------+
| # FAS 2005      | # MY 2006/07    | Commercial S&D  |                 |
|                 |                 |                 |                 |
| forecast        | # May/April     |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| '000 Metric     | White           | Yellow          | Total           |
| tons            |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| B/Stocks        | 2885            | 550             | 3435            |
+-----------------+-----------------+-----------------+-----------------+
| Comm. crop      | 5250            | 3550            | 8800            |
+-----------------+-----------------+-----------------+-----------------+
| Farm retentions | 100             | 300             | 400             |
+-----------------+-----------------+-----------------+-----------------+
| Delivery        | 5150            | 3250            | 8400            |
| forecast        |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Imports         | 0               | 200             | 200             |
+-----------------+-----------------+-----------------+-----------------+
| Total supply    | 8035            | 4000            | 12035           |
+-----------------+-----------------+-----------------+-----------------+
| Exports         | 800             | 50              | 850             |
+-----------------+-----------------+-----------------+-----------------+
| Dom.            | 4575            | 3575            | 8150            |
| Consumption     |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Ending stocks   | 2660            | 375             | 3035            |
+-----------------+-----------------+-----------------+-----------------+

SAGIS shows actual sales during the season giving a good indication of
the uses for white and yellow corn.

  ----------------- ----------------- ----------------- -----------------
  FAS 2002          MY 2003/04        SAGIS consumpt.   

  '000 Mt.          White corn        Yellow            Total

  Human cons.       3,467             245               3,712

  Animal feed       641               2,775             3,416

  Other uses\*      361               351               712

  Total             4,469             3,371             7,840
  ----------------- ----------------- ----------------- -----------------

\*Withdrawn by producers, sold to end-consumers, product exports and
gristing, (milled for producers).

Note the 3.5 million tons of white corn used for human consumption, the
main staple food in Southern Africa, and the 641,000 tons of white corn
used for animal feed brought about by the abundance of white corn and a
shortage of yellow.

# Stocks

The most notable feature of the PS&D is the increased carry over stocks.
This grew from about 2 million tons at the end of April 2003 to 2.4
million tons in 2004 and an expected 3 million tons in 2005. If current
trends continue, the carry over could reach 3.4 million tons in 2006
before declining. For clarity, we only count old season stocks at the
end of the marketing year.

**Prices**

Local producer prices peaked at the end of November 2004 when it was
still dry but has been dropping since the onset of the rains. Dollar
prices declined in line with local prices and the weakening Dollar.

  -------------- --------------- --------------- --------------- --------------
  Futures prices March 2005      May 2005        July 2005       September 05

  White corn/mt.                                                 

  11/01/04       R1071=\$175.6   R1089=\$178.5   R1100=\$180.3   

  11/29/04       R976=\$166.8    R993=\$169.7    R1009=\$172.5   

  12/28/04       R749=\$131.4    R771=\$135.3    R784=\$137.5    

  01/25/05       R551=\$ 91.8    R580=\$ 96.7    R603=\$100.5    R624=\$104.0

  Yellow/mt.                                                     

  11/01/04       R1041=\$170.7   R1005=\$164.8   R1010=\$165.6   

  11/29/04       R927=\$159.0    R912=\$155.9    R930=\$159.0    

  12/28/04       R791=\$138.8    R804=\$141.0    R797=\$139.8    

  01/25/05       R639=\$106.5    R649=\$108.2    R646=\$107.7    R675=\$112.5
  -------------- --------------- --------------- --------------- --------------

An example of how indicative import parity prices can be calculated is
shown in the following table:

+-----------------+-----------------+-----------------+-----------------+
| 2005/03         | US#2 HRW Wheat, | Argentina corn  | US#3 Yellow     |
|                 | Gulf            |                 | corn, Gulf      |
| US\$/metric ton |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| FOB             | 137.46          | 81.00           | 90.84           |
+-----------------+-----------------+-----------------+-----------------+
| Freight         | 49.00           | 45.00           | 49.00           |
| 20-30,000       |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Insurance       | 0.41            | 0.24            | 0.27            |
+-----------------+-----------------+-----------------+-----------------+
| CIF             | 186.87          | 126.24          | 140.11          |
+-----------------+-----------------+-----------------+-----------------+
| In Rand/ton     | 1146.28         | 774.37          | 859.45          |
| \@6.13          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Financing,      | 10.36           | 7.00            | 7.77            |
| (11%)           |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Discharging     | 90.81           | 90.81           | 90.81           |
+-----------------+-----------------+-----------------+-----------------+
| Import tariff   | 18.67           | 84.24           | 84.24           |
+-----------------+-----------------+-----------------+-----------------+
| FOR Durban      | 1266.12         | 956.42          | 1042.27         |
+-----------------+-----------------+-----------------+-----------------+

The abovementioned SAFEX prices are ex Randfontein from where transport
cost to Durban is R172/ton and Cape Town about R240/ton. This must then
be added to the SAFEX prices to get a coastal price, which makes imports
competitive in the coastal areas.

On the other hand overseas export parity is calculated at about R357/ton
ex Durban, which makes exports unlikely.

**Trade**

Exports

To date in the current season, export sales have been slow as the region
in general had reasonable crops and thus some stocks after harvest.
Sales over the next few months should improve. Export sales for the
first nine months of the current season from May 1, 2004, to February 5,
2005, follow:

  ----------------- ----------------- ----------------- -----------------
  RSA Corn exports, White             Yellow            Total
  mt                                                    

  Angola            23,545            0                 23,545

  Botswana          79,957            7,653             87,610

  Congo             216               0                 216

  Kenya             120,966           0                 120,966

  Lesotho           82,993            4,204             87,197

  Mozambique        24,088            3,956             28,044

  Namibia           15,869            10,043            25,912

  Swaziland         9,533             21,043            30,576

  Zimbabwe          117,114           96                117,210

  Madagascar        2,382             0                 2,382

  Total             476,663           46,995            523,648
  ----------------- ----------------- ----------------- -----------------

Customs Union sales currently form the basis of the export market. These
amounted to about 450,000 tons in the 2003/04 season. Up to February 5,
2005, sales to the Customs Union only amounted to 231,295 tons implying
that total sales for the season are only likely to reach about 300,000
tons.

Total exports for the 2004/05 season are only likely to reach 650,000
tons, after 1.125 million tons were exported in MY 2003/04. The drop in
exports is due to better supplies in the region and a cut back in food
aid purchases, i.e. brought about by a ban on food aid in Zimbabwe.

Unfortunately calendar year trade data are not yet available but will be
submitted as soon as they are released. The export trade matrix is
supplied on a local marketing year basis:

+----------------------+-------------+-------------------+-------------+
| **Exports**          |             |                   |             |
+----------------------+-------------+-------------------+-------------+
| **Country**          | **South**   | ###### Africa     |             |
+----------------------+-------------+-------------------+-------------+
| **Commodity**        | **Corn**    |                   |             |
+----------------------+-------------+-------------------+-------------+
| Time Period          | May/April   | Units:            | May/Feb.5   |
+----------------------+-------------+-------------------+-------------+
| Exports for:         | 2003/04     | Metric tons       | 2004/05     |
+----------------------+-------------+-------------------+-------------+
| U.S.                 | 0           | U.S.              | 0           |
+----------------------+-------------+-------------------+-------------+
| Others               |             | Others            |             |
+----------------------+-------------+-------------------+-------------+
| Zimbabwe             | 413657      | Zimbabwe          | 117210      |
+----------------------+-------------+-------------------+-------------+
| Botswana             | 141515      | Botswana          | 87610       |
+----------------------+-------------+-------------------+-------------+
| Lesotho              | 130002      | Lesotho           | 87197       |
+----------------------+-------------+-------------------+-------------+
| Namibia              | 121769      | Namibia           | 25912       |
+----------------------+-------------+-------------------+-------------+
| Mozambique           | 90189       | Mozambique        | 28044       |
+----------------------+-------------+-------------------+-------------+
| Swaziland            | 55294       | Swaziland         | 30576       |
+----------------------+-------------+-------------------+-------------+
| Kenya                | 48150       | Kenya             | 120966      |
+----------------------+-------------+-------------------+-------------+
| Tanzania             | 34781       |                   | 0           |
+----------------------+-------------+-------------------+-------------+
| Cape Verde           | 28840       |                   | 0           |
+----------------------+-------------+-------------------+-------------+
| Madagascar           | 12381       | Madagascar        | 2382        |
+----------------------+-------------+-------------------+-------------+
| Total for Others     | 1076578     |                   | 499897      |
+----------------------+-------------+-------------------+-------------+
| Others not Listed    | 36210       |                   | 23751       |
+----------------------+-------------+-------------------+-------------+
| Grand Total          | 1112788     |                   | 523648      |
+----------------------+-------------+-------------------+-------------+

Imports

During MY 2003/04 South Africa imported nearly 60,000 tons of white corn
from the US of which 27,000 tons were for transshipment to other African
states and 33,000 tons for own use. Yellow corn imports amounted to
404,000 tons, 388,000 tons from Argentina and 8,000 tons each from the
US and China.

Imports to date in the current season amount to about 207,000 tons with
192,000 from Argentina and 15,500 tons from the US.

+----------------------+-------------+------------------+-------------+
| **Imports**          |             |                  |             |
+----------------------+-------------+------------------+-------------+
| **Country**          | **South**   | ####### Africa   |             |
+----------------------+-------------+------------------+-------------+
| **Commodity**        | **Corn**    |                  |             |
+----------------------+-------------+------------------+-------------+
| Time Period          | May/April   | Units:           | May/Feb.5   |
+----------------------+-------------+------------------+-------------+
| Imports for:         | 2003/04     | Metric tons      | 2004/05     |
+----------------------+-------------+------------------+-------------+
| U.S.                 | 68318       | U.S.             | 15508       |
+----------------------+-------------+------------------+-------------+
| Others               |             | Others           |             |
+----------------------+-------------+------------------+-------------+
| Argentina            | 387924      | Argentina        | 191848      |
+----------------------+-------------+------------------+-------------+
| China                | 8158        | Malawi           | 724         |
+----------------------+-------------+------------------+-------------+
| Total for Others     | 396082      |                  | 192572      |
+----------------------+-------------+------------------+-------------+
| Others not Listed    | 0           |                  | 0           |
+----------------------+-------------+------------------+-------------+
| Grand Total          | 532718      |                  | 208080      |
+----------------------+-------------+------------------+-------------+

# Policy

The import duty on corn was increased from R31.68/ton (about \$5) to
R84.24/ton (\$14) on January 13, 2005. The duty is calculated on a fixed
formula basis explained on the Sagis website. Farmers still claim that
this is insufficient to support domestic prices and are asking for a
much higher tariff. This is unlikely to be granted as the slow increase
in food prices has a positive effect on the inflation rate. Having
inflation under control is a high priority for the government and a big
factor supporting the strong SA Rand.

###### Marketing

South Africa allows the production of genetically modified crops under
controlled conditions. Only certain events are registered for use on
corn. They are Bt11, Bt 176, Cry1F, Mon810, Mon810+Nk603, MonGA21,
Nk603, T25. Imports are thus restricted to corn including only these
events, in effect barring US yellow corn from the market. Since the
United States has no commercially produced biotech white corn, US white
corn may enter Southern Africa.

###### Feed

Basic ingredients used by the Association of Feed Manufacturers' members
(AFMA) in the formal feed industry over the past April/March season are
listed in the following table:

  ------------------------------------------- ------------- -------------
  MATERIAL                                    TOTAL (mt)    Inclusion
                                                            rate

                                              2003/2004     2003/2004

  Fish meal                                   114,402       2.73%

  Full fat Soya                               88,950        2.12%

  Hominy chop                                 104,250       2.49%

  Limestone grit                              56,565        1.35%

  Limestone powder                            68,660        1.64%

  Alfalfa hay                                 46,306        1.10%

  Corn/Maize \*                               2,132,551     49.87%

  Corn/Maize products                         91,052        2.17%

  Molasses                                    142,190       3.39%

  Monocalsium phosphate                       24,937        0.59%

  Poultry by-products                         53,702        1.28%

  Salt                                        28,586        0.68%

  Soya Oilcake                                364,882       8.70%

  Sunflower seed, oilcake and hulls           275,823       6.58%

  Wheaten bran, flour and straw               271,985       6.49%

  Other Raw Materials                         249,902       5.96%

  TOTAL                                       4,114,743     98.14%

  Feed sales for the period                   4,192,540      
  ------------------------------------------- ------------- -------------

Corn and products thus forms more than half of the products used in
formal feed milling. On farm feed mixing uses even more corn and
by-products from the big corn milling industry, SAGIS reported sales of
3.4 million tons for feed in MY2003/04 while AFMA members only used 2.1
million implying at least 1.3 million tons used for feed outside the
formal mixed feed sector. The following table shows the use of different
corn products by AFMA members:

  ---------------------- ----------- -------- ----------- -------- ----------- --------
    Metric tons          2001/2002   \% Inc.  2002/2003   \% Inc.  2003/04     \% Inc.

  Corn (Incl. meal)      2,025,262   50.14%   2,075,308   50.56%   2,147,262   51.22%

  Corn gluten meal (20%) 41,811      1.04%    31,999      0.76%    29,567      0.71%

  Corn gluten meal (60%) 20,799      0.51%    16,283      0.39%    17,100      0.41%

  Corn screenings        12,811      0.32%    6,015       0.14%    5,268       0.13%

  Corn germ meal         30,526      0.76%    15,945      0.38%    23,737      0.57%

  Defatted corn germ     19,224      0.48%    15,611      0.37%    16,189      0.39%
  meal                                                                         

  Corn germ oilcake      934         0.02%    291         0.01%    669         0.02%

  Hominy chop            105,781     2.62%    102,201     2.44%    104,250     2.49%

  TOTAL                  2,257,148   55.88%   2,263,653   53.99%   2,344,042   55.91%

  Total Feed Production  4,039,058            4,104,693            4,192,540    
  ---------------------- ----------- -------- ----------- -------- ----------- --------

# WHEAT

+-----------------+------------+------+-------+------+-------+------+
| ####            |            |      |       |      |       |      |
| ##### PSD Table |            |      |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+
| **Country**     | **South    |      |       |      |       |      |
|                 | Africa**   |      |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+
| **Commodity**   | **Wheat**  |      |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+
| '000 ha.        | 2003       | Rev  | 2004  | Esti | 2005  | Fore |
|                 |            | ised |       | mate |       | cast |
+-----------------+------------+------+-------+------+-------+------+
| '000 mt.        | USDA       | Post | USDA  | Post | USDA  | Post |
|                 | Official   | \[N  | \[    | \[N  | \[    | \[N  |
|                 | \[Old\]    | ew\] | Old\] | ew\] | Old\] | ew\] |
+-----------------+------------+------+-------+------+-------+------+
| **Market Year   |            | 10/  |       | 10/  |       | 10/  |
| Begin**         |            | 2003 |       | 2004 |       | 2005 |
+-----------------+------------+------+-------+------+-------+------+
| Area Harvested  | 748        | 748  | 850   | 851  | 0     | 800  |
+-----------------+------------+------+-------+------+-------+------+
| Beginning       | 898        | 897  | 596   | 614  | 486   | 344  |
| Stocks          |            |      |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+
| Production      | 1540       | 1540 | 1800  | 1730 | 0     | 1750 |
+-----------------+------------+------+-------+------+-------+------+
| TOTAL Mkt. Yr.  | 1278       | 1278 | 1100  | 1100 | 0     | 1150 |
| Imports         |            |      |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+
| Jul-Jun Imports | 911        | 837  | 1100  | 850  | 0     | 850  |
+-----------------+------------+------+-------+------+-------+------+
| Jul-Jun Import  | 488        | 414  | 0     | 500  | 0     | 450  |
| U.S.            |            |      |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+
| TOTAL SUPPLY    | 3716       | 3715 | 3496  | 3444 | 486   | 3244 |
+-----------------+------------+------+-------+------+-------+------+
| TOTAL Mkt. Yr.  | 379        | 379  | 350   | 375  | 0     | 380  |
| Exports         |            |      |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+
| Jul-Jun Exports | 356        | 320  | 350   | 350  | 0     | 350  |
+-----------------+------------+------+-------+------+-------+------+
| Feed Dom.       | 10         | 30   | 10    | 30   | 0     | 30   |
| Consumption     |            |      |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+
| TOTAL Dom.      | 2741       | 2722 | 2660  | 2725 | 0     | 2730 |
| Consumption     |            |      |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+
| Ending Stocks   | 596        | 614  | 486   | 344  | 0     | 134  |
+-----------------+------------+------+-------+------+-------+------+
| TOTAL           | 3716       | 3715 | 3496  | 3444 | 0     | 3244 |
| DISTRIBUTION    |            |      |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+

# Production

Since December the 2004 wheat crop estimate declined by another 22,000
tons to 1.73 million tons. The decrease in the estimate is mainly due to
a regional drought in parts of the Western Cape. The crop, however,
still exceeds the 2003 crop of 1.54 million tons mainly due to an
increase in the area planted from 748,000 hectares to 851,000 hectares.

As a result of the current drought and low prices, the area planted in
2005 is expected to decline to about 800,000 ha. This will, however,
depend on the success of the current efforts to protect the local market
from cheap imports. Farmers are asking for additional tariff protection
as the strong Rand allows inexpensive imports. Rainfall later in the
season will also play a major role in the planting decisions. Under
normal conditions a crop of about 1.75 million tons can be expected
which will still leave a shortfall in excess of 1.1 million tons to be
met by imports.

# Consumption

While the PS&D supplied above gives the total picture, SAGIS figures
highlights the quantity actually commercially milled for human
consumption. The following table contains the details for the past two
seasons:

  ----------------------- ----------------------- -----------------------
  Wheat consumption,000mt MY 2002/03, Oct. to     MY 2003/04
                          Sept.                   

  Human consumption       2,575                   2,653 (+3%)

  Other uses              63                      43

  Total                   2,638                   2,696
  ----------------------- ----------------------- -----------------------

**Trade:**

Unfortunately calendar year trade data are not yet available, but data
for the past two completed seasons are available:

  ----------------------- ----------------------- -----------------------
  Wheat trade, '000 mt.   MY 2002/03, Oct. to     MY 2003/04
                          Sept.                   

  Imports, for the RSA    747                     1,042

  For neighboring states  123                     236

  Total                   870                     1,278

  Exports, from the RSA   179                     158

  Re-exports of imports   131                     198

  Total                   310                     356
  ----------------------- ----------------------- -----------------------

Trade by country of origin or destination is also available for the
2003/04 season and from October 04 to end January 05.

+-----------------+-----------------+-----------------+-----------------+
| **MY 2003/04**  | **For Africa**  | **For RSA**     | **Total**       |
+-----------------+-----------------+-----------------+-----------------+
| # Imports, mt.  |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| USA             | 146,660         | 413,429         | 560,089 (44%)   |
+-----------------+-----------------+-----------------+-----------------+
| Canada          | 13,767          | 0               | 13,767          |
+-----------------+-----------------+-----------------+-----------------+
| Germany         | 3,873           | 12,199          | 16,072          |
+-----------------+-----------------+-----------------+-----------------+
| U.K.            | 0               | 22,420          | 22,420          |
+-----------------+-----------------+-----------------+-----------------+
| Australia       | 0               | 298,504         | 298,504 (23%)   |
+-----------------+-----------------+-----------------+-----------------+
| Argentina       | 73,816          | 268,218         | 342,034 (27%)   |
+-----------------+-----------------+-----------------+-----------------+
| France          | 0               | 25,016          | 25,016          |
+-----------------+-----------------+-----------------+-----------------+
| **Total**       | **238,116**     | **1,039,786**   | **1,277,902**   |
+-----------------+-----------------+-----------------+-----------------+
| # Exports, mt.  |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Botswana        |                 |                 | 88,559          |
+-----------------+-----------------+-----------------+-----------------+
| Lesotho         |                 |                 | 74,656          |
+-----------------+-----------------+-----------------+-----------------+
| Namibia         |                 |                 | 12,622          |
+-----------------+-----------------+-----------------+-----------------+
| Swaziland       |                 |                 | 40,634          |
+-----------------+-----------------+-----------------+-----------------+
| Zimbabwe        |                 |                 | 102,598         |
+-----------------+-----------------+-----------------+-----------------+
| Zambia          |                 |                 | 37,430          |
+-----------------+-----------------+-----------------+-----------------+
| **Total**       |                 |                 | **356,499**     |
+-----------------+-----------------+-----------------+-----------------+

+-----------------+-----------------+-----------------+-----------------+
| **MY 2004/05**  | **For Africa**  | **For RSA**     | **Total**       |
|                 |                 |                 |                 |
| **O             |                 |                 |                 |
| ct.04/Febr.05** |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| **Imports,      |                 |                 |                 |
| mt.**           |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Argentina       | 33,546          | 214,178         | 247,724 (55%)   |
+-----------------+-----------------+-----------------+-----------------+
| USA             | 24,937          | 98,288          | 123,225 (27%)   |
+-----------------+-----------------+-----------------+-----------------+
| Australia       | 0               | 49,778          | 49,778 (11%)    |
+-----------------+-----------------+-----------------+-----------------+
| U.K.            | 0               | 27,586          | 27,586          |
+-----------------+-----------------+-----------------+-----------------+
| **Total**       | **58,483**      | **389,830**     | **448,313**     |
+-----------------+-----------------+-----------------+-----------------+
| **Exports,      |                 |                 |                 |
| mt**.           |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Botswana        |                 |                 | 20,042          |
+-----------------+-----------------+-----------------+-----------------+
| Lesotho         |                 |                 | 37,784          |
+-----------------+-----------------+-----------------+-----------------+
| Namibia         |                 |                 | 3,507           |
+-----------------+-----------------+-----------------+-----------------+
| Swaziland       |                 |                 | 11,280          |
+-----------------+-----------------+-----------------+-----------------+
| Zambia          |                 |                 | 11,382          |
+-----------------+-----------------+-----------------+-----------------+
| Zimbabwe        |                 |                 | 36,127          |
+-----------------+-----------------+-----------------+-----------------+
| # Total         |                 |                 | **120,122**     |
+-----------------+-----------------+-----------------+-----------------+

  ------------------- ------------------- ---------------- ---------------
  **Exports**                                              

  **Country**         **South Africa**                     

  **Commodity**       **Wheat**                            

  Time Period         Oct./Sept.          Units:           Oct./end Jan.

  Exports for:        2003/04                              2004/05

  U.S.                0                   U.S.             0

  Others                                  Others           

  Botswana            88559               Botswana         20042

  Lesotho             74656               Lesotho          37784

  Namibia             12622               Namibia          3507

  Swaziland           40634               Swaziland        11280

  Zimbabwe            102598              Zimbabwe         36127

  Zambia              37430               Zambia           11382

  Total for Others    356499                               120122

  Others not Listed   0                                    0

  Grand Total         356499                               120122
  ------------------- ------------------- ---------------- ---------------

  -------------------- ------------------- ----------------- --------------
  **Imports**                                                

  **Country**          **South Africa**                      

  **Commodity**        **Wheat**                             

  Time Period          Oct/Sept            Units:            Oct/end Jan

  Imports for:         2003/04                               2004/05

  U.S.                 560089              U.S.              123225

  Others                                   Others            

  Argentina            342034              Argentina         247724

  Australia            298504              Australia         49778

  France               25016               U.K.              27586

  U.K.                 22420                                  

  Germany              16072                                  

  Canada               13767                                  

  Total for Others     717813                                325088

  Others not Listed    0                                      

  Grand Total          1277902                               448313
  -------------------- ------------------- ----------------- --------------

# RICE

+-----------------+------------+------+-------+------+-------+------+
| **PSD Table**   |            |      |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+
| **Country**     | **South**  | ##   |       |      |       |      |
|                 |            | #### |       |      |       |      |
|                 |            | # Af |       |      |       |      |
|                 |            | rica |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+
| **Commodity**   | **Rice,**  | ##   |       |      |       |      |
|                 |            | #### |       |      |       |      |
|                 |            | # Mi |       |      |       |      |
|                 |            | lled |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+
| 1000 ha.        | 2003       | Rev  | 2004  | Esti | 2005  | Fore |
|                 |            | ised |       | mate |       | cast |
+-----------------+------------+------+-------+------+-------+------+
| 1000 mt.        | USDA       | Post | USDA  | Post | USDA  | Post |
|                 | Official   | N    | \[    | \[N  | \[    | \[N  |
|                 | \[Old\]    | ew\] | Old\] | ew\] | Old\] | ew\] |
+-----------------+------------+------+-------+------+-------+------+
| **Market Year   |            | 01/  |       | 01/  |       | 01/  |
| Begin**         |            | 2003 |       | 2004 |       | 2005 |
+-----------------+------------+------+-------+------+-------+------+
| Area Harvested  | 0          | 0    | 0     | 0    | 0     | 0    |
+-----------------+------------+------+-------+------+-------+------+
| Beginning       | 180        | 0    | 195   | 0    | 235   | 0    |
| Stocks          |            |      |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+
| Milled          | 0          | 0    | 0     | 0    | 0     | 0    |
| Production      |            |      |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+
| Rough           | 0          | 0    | 0     | 0    | 0     | 0    |
| Production      |            |      |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+
| MILLING RATE    | 0          | 0    | 0     | 0    | 0     | 0    |
| (.9999)         |            |      |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+
| TOTAL Imports   | 725        | 791  | 800   | 720  | 0     | 750  |
+-----------------+------------+------+-------+------+-------+------+
| Jan-Dec Imports | 800        | 791  | 700   | 720  | 0     | 750  |
+-----------------+------------+------+-------+------+-------+------+
| Jan-Dec Import  | 0          | 70   | 0     | 1    | 0     | 5    |
| U.S.            |            |      |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+
| TOTAL SUPPLY    | 905        | 791  | 995   | 720  | 235   | 750  |
+-----------------+------------+------+-------+------+-------+------+
| TOTAL Exports   | 10         | 13   | 10    | 13   | 0     | 15   |
+-----------------+------------+------+-------+------+-------+------+
| Jan-Dec Exports | 10         | 13   | 10    | 13   | 0     | 15   |
+-----------------+------------+------+-------+------+-------+------+
| TOTAL Dom.      | 700        | 778  | 750   | 707  | 0     | 735  |
| Consumption     |            |      |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+
| Ending Stocks   | 195        | 0    | 235   | 0    | 0     | 0    |
+-----------------+------------+------+-------+------+-------+------+
| TOTAL           | 905        | 791  | 995   | 720  | 0     | 750  |
| DISTRIBUTION    |            |      |       |      |       |      |
+-----------------+------------+------+-------+------+-------+------+

South Africa does not produce rice and the PS&D is based on imports and
exports. The trade data from the World Trade Atlas is for the Customs
Union including the BLNS countries and all the data thus includes them.
Rice is imported free of duty.

  -------------------- -------------------- ----------------- ------------
  **Imports**                                                 

  **Country**          **South Africa**                       

  **Commodity**        **Rice, Milled**                       

  Time Period          CY                   Units:            Jan-Nov

  Imports for:         2003                 Metric tons       2004

  U.S.                 69744                U.S.              424

  Others                                    Others            

  Thailand             390076               Thailand          551287

  India                316152               India             98344

  Uruguay              2839                 Uruguay           1091

  Vietnam              2830                 Suriname          781

  Pakistan             2233                 Pakistan          1978

  Australia            1948                 Australia         2372

  China                1683                 China             899

  Mozambique           936                  Indonesia         705

                                            UAE               974

                                            Taiwan            516

  Total for Others     718697                                 658947

  Others not Listed    2361                                   1354

  Grand Total          790802                                 660725
  -------------------- -------------------- ----------------- ------------

  --------------------- ------------------ ------------------ -------------
  **Exports**                                                 

  **Country**           **South Africa**                      

  **Commodity**         **Rice, Milled**                      

  Time Period           CY                 Units:             Jan-Nov

  Exports for:          2003               Metric tons        2004

  U.S.                  0                  U.S.               0

  Others                                   Others             

  Zambia                5632               Zambia             5911

  Zimbabwe              4020               Dem. Congo         2926

  Dem. Congo            1329               Zimbabwe           2013

  Mozambique            701                Mozambique         472

  Angola                401                Angola             378

  Congo                 240                Guinea             92

  Malawi                140                Congo              81

  Kenya                 69                 St. Helena         44

  Tanzania              56                                     

                                                               

  Total for Others      12588                                 11917

  Others not Listed     133                                   102

  Grand Total           12721                                 12019
  --------------------- ------------------ ------------------ -------------