Voluntary Report - public distribution

Date: 3/31/2006

GAIN Report Number: SF6011

SF6011

South Africa, Republic of

Grain and Feed

Monthly Update

2006

Approved by:

![](media/image1.wmf)Rachel Bickford

#### **U.S. Embassy, South Africa**

Prepared by:

Herman Germishuis

Report Highlights:

South Africa\'s corn crop planted in 2005 is currently estimated at
6.375 million tons, a dramatic decline from the 11.7 million tons
produced in 2004. The decrease is due to a voluntary 45% cutback in area
planted in an effort to balance supply and demand and bolster prices.
Prices have increased but so has the demand for imports while export
demand declined. The crop should, however be able to supply the local
and usual export demand for white corn while the yellow corn shortage is
being met by imports.

> Includes PSD Changes: Yes

Includes Trade Matrix: No

Unscheduled Report

Pretoria \[SF1\]

\[SF\]

###### Summary

In an effort to balance corn supply and demand South African commercial
farmers cut the area planted by 45% from 2.8 million ha. in 2004 to 1.5
million ha. in 2005. As a result the crop is expected to decline by 47%
from 11.45 million tons to 6.06 million tons. After a slow start to the
2005/06-rainfall season, precipitation improved from mid December while
heavy rains followed in January, February and March. At the moment the
far western production areas are either flooded or waterlogged and
substantial damage is feared. A lack of sunlight and heat increments and
the leaching of fertilizer are compounding the problems. The second
official crop estimate quoted above was already 2.5% lower than the
initial estimate and a further decrease is expected. Further untimely
cold weather and early frost can still cause substantial damage to the
crop.

Due to an estimated carry over of about 3 million tons at the end of
April 2006 the commercial crop should be sufficient to supply the local
need of about 8 million tons. The problem is that the market is divided
between white corn for human consumption and yellow corn for animal
feed. White corn stocks should be sufficient for domestic and
traditional export needs while yellow corn is being imported to make up
the shortfall. The net result of the exercise is that prices for 2006
have increased to about \$190/mt. for white and \$160/mt. for yellow
corn.

US\$1 = Rand 6.25 (03/30/06)

[**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}**

CORN

  ------------------- --------- --------- --------- ---------- --------- ----------
  PSD Table                                                              

  Country             South                                              
                      Africa                                             

  Commodity           Corn                                               

  1000 HA             2004      Revised   2005      Estimate   2006      Forecast

  1000 MT             USDA      Post      USDA      Post       USDA      Post
                      \[Old\]   \[New\]   \[Old\]   \[New\]    \[Old\]   \[New\]

  Market Year Begin             05/2005             05/2006              05/2007

  Area Harvested      3223      3223      2200      1980       0         2500

  Beginning Stocks    2956      2935      2872      3000       1722      300

  Production          11716     11715     7500      6375       0         9000

  TOTAL Mkt. Yr.      250       360       700       750        0         700
  Imports                                                                

  Oct-Sep Imports     131       140       250       470        0         700

  Oct-Sep Import U.S. 0         4         0         0          0         0

  TOTAL SUPPLY        14922     15010     11072     10125      1722      10000

  TOTAL Mkt. Yr.      2100      2200      400       750        0         500
  Exports                                                                

  Oct-Sep Exports     1517      2600      1200      1200       0         500

  Feed Dom.           4800      5100      4400      4400       0         4500
  Consumption                                                            

  TOTAL Dom.          9950      9810      8950      9075       0         9000
  Consumption                                                            

  Ending Stocks       2872      3000      1722      300        0         500

  TOTAL DISTRIBUTION  14922     15010     11072     10125      0         10000
  ------------------- --------- --------- --------- ---------- --------- ----------

# **Production**

The second official production estimate and the revised area planted
estimate for the FAS 2005 commercial corn crop were released on March
23, 2006. The area planted is estimated at 1.55 million hectares and the
crop at 6.1 million tons. The area planted is 45% smaller than the
previous season and the crop is down 47%. The decline is mainly due to a
voluntary cutback in production in an effort to balance supply and
demand.

After a late start to the rainfall season precipitation picked up in
December and January, February and March rainfall was very good, even
excessive in some areas. The crop in the east was well developed and
only needed a few weeks of sunshine to mature. Unfortunately the recent
weather was mostly overcast with very little sunlight and decreased heat
increments. Retarded growth and maturity lead to cobs not filling out
fully which affects the yield. Late plantings in the far western areas
have not yet matured and are being affected by the cold and overcast
weather. At the moment big areas of the North West Province and the
northwestern Free State are still flooded or waterlogged and suffering
from an outbreak of Northern Leaf Blight which is affecting yields and
we foresee a further decline in the crop estimate. There was also a
small correction made to the area planted estimate to include very late
plantings. Crop yields have, however, lost the potential to increase,
and we will not see a second consecutive yield record being achieved.

Although the 2005 irrigated area planted has not been released, the 2004
plantings amounted to 70,000 ha. white corn and 120,000 ha. yellow for a
total of 190,000 ha. This was only about 7% of the area planted in 2004
but if the same area were irrigated in 2005 it would amount to about
12.3%. At 10 tons plus per hectare the irrigated production thus plays a
bigger role in total production and increases the average yield for the
whole crop.

The crop in the developing sector has also been announced at 317,000
tons from 432,000 hectares, an improvement on the previous crop. As a
result of the cutback in the area planted in the commercial sector, the
area and production in the developing sector plays a more important role
in the total crop and the average yield.

We also forecast the 2006 season - this is the crop to be planted from
November 2006. As the 2005 situation is still very unsettled we have to
consider the possible after effects of the 2005 cutback in area planted.
The current high prices are likely to restore some of the area to corn
while we can only use recent average yields trends at this stage.

A production estimate based on the year of planting and normal rainfall
from now on follows:

<table style="width:100%;">
<colgroup>
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 10%" />
<col style="width: 9%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 10%" />
</colgroup>
<tbody>
<tr class="odd">
<td>CORN</td>
<td><p>2004 area</p>
<p>’000 ha.</p></td>
<td><p>Yield</p>
<p>MT/ha</p></td>
<td><p>Prod.</p>
<p>’000 MT</p></td>
<td><p>2005 area</p>
<p>’000 ha.</p></td>
<td><p>Yield</p>
<p>MT/ha</p></td>
<td><p>Prod.</p>
<p>’000 MT</p></td>
<td><p>2006</p>
<p>Area</p>
<p>‘000 ha.</p></td>
<td><p>Yield</p>
<p>MT/ha</p></td>
<td><p>Prod.</p>
<p>‘000</p>
<p>MT</p></td>
</tr>
<tr class="even">
<td>Com.</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>White</td>
<td>1,700</td>
<td>3.8</td>
<td>6,540</td>
<td>973</td>
<td>3.8</td>
<td>3,670</td>
<td>1,300</td>
<td>4.1</td>
<td>5,325</td>
</tr>
<tr class="even">
<td>Yellow</td>
<td>1,110</td>
<td>4.4</td>
<td>4,910</td>
<td>575</td>
<td>4.2</td>
<td>2,390</td>
<td>800</td>
<td>4.3</td>
<td>3,425</td>
</tr>
<tr class="odd">
<td>Total</td>
<td>2,810</td>
<td>4.1</td>
<td>11450</td>
<td>1,548</td>
<td>3.9</td>
<td>6,060</td>
<td>2,100</td>
<td>4.2</td>
<td>8,750</td>
</tr>
<tr class="even">
<td>Dev.</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>White</td>
<td>325</td>
<td>0.6</td>
<td>203</td>
<td>349</td>
<td>0.7</td>
<td>238</td>
<td>325</td>
<td>0.6</td>
<td>200</td>
</tr>
<tr class="even">
<td>Yellow</td>
<td>89</td>
<td>0.7</td>
<td>63</td>
<td>86</td>
<td>0.9</td>
<td>79</td>
<td>75</td>
<td>0.7</td>
<td>50</td>
</tr>
<tr class="odd">
<td>Total</td>
<td>414</td>
<td>0.6</td>
<td>266</td>
<td>432</td>
<td>0.7</td>
<td>317</td>
<td>400</td>
<td>0.6</td>
<td>250</td>
</tr>
<tr class="even">
<td>Total corn</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>White</td>
<td>2,025</td>
<td>3.3</td>
<td>6,743</td>
<td>1,319</td>
<td>3.0</td>
<td>3,908</td>
<td>1,625</td>
<td>3.4</td>
<td>5,525</td>
</tr>
<tr class="even">
<td>Yellow</td>
<td>1,199</td>
<td>4.1</td>
<td>4,973</td>
<td>661</td>
<td>3.7</td>
<td>2,469</td>
<td>875</td>
<td>4.0</td>
<td>3,475</td>
</tr>
<tr class="odd">
<td>TOTAL</td>
<td>3,224</td>
<td>3.6</td>
<td>11716</td>
<td>1,980</td>
<td>3.2</td>
<td>6,377</td>
<td>2,500</td>
<td>3.6</td>
<td>9,000</td>
</tr>
</tbody>
</table>

The 2004 and 2005 area and production estimate for the main production
areas, the Free State, North West and Mpumalanga, follows:

  ------------ ------- -------- ------- ------- -------- ------- ------- -------- -------
               Area    '000     Ha      Yield   MT/ha            Prod.   '000     MT

               White   Yellow   Total   White   Yellow   Total   White   Yellow   Total

  Free State                                                                      

  2004         660     385      1045    4.0     3.8      3.9     2658    1455     4113

  2005         340     193      533     3.9     3.6      3.8     1309    693      2002

  North West                                                                      

  2004         680     215      895     3.2     3.2      3.2     2185    678      2863

  2005         375     112      487     3.0     2.9      3.0     1125    325      1450

  Mpumalanga                                                                      

  2004         224     336      560     5.1     5.0      5.0     1134    1673     2807

  2005         154     182      336     4.5     4.4      4.5     693     801      1494

  Total                                                                           

  2004         1700    1110     2810    3.9     4.4      4.1     6541    4909     11450

  2005         973     575      1548    3.9     4.2      3.9     3670    2390     6060
  ------------ ------- -------- ------- ------- -------- ------- ------- -------- -------

**Consumption**

We include commercial silo deliveries for March and April in our
delivery figure as, depending on the season, the new crop becomes
available from March each year. We would normally expect to receive only
a few thousand tons in February.

Commercial deliveries up to the end of February 2006 are shown in the
following table:

  ----------------- ----------------- ----------------- -----------------
  Deliveries '000   White corn        Yellow corn       Total corn
  MT                                                    

  March 2005        18                53                71

  April             37                104               141

  May -- Febr.      6,065             3,892             9,957

  TOTAL             6,120             4,049             10,169

  Crop estimate     6,540             4,910             11,450

  Farm retentions   420               861               1,281
  ----------------- ----------------- ----------------- -----------------

There is still more than 1.2 million tons of the revised 2004 crop
unaccounted for. We can consider this as farm retentions although it is
much higher than the usual estimate of 450,000 tons (100,000 tons white
and 350,000 tons yellow) retained on farms. It can also be assumed that
a portion of the additional retentions is being stored for later sale.

A commercial PS&D based on deliveries can be supplied to highlight the
current situation.

+-------------------+----------------+----------------+----------------+
| # FAS 2004        | #              | #              | '000 MT        |
|                   | May05/April 06 | Commercial S&D |                |
+-------------------+----------------+----------------+----------------+
| '000 Metric tons  | White          | Yellow         | Total          |
+-------------------+----------------+----------------+----------------+
| B/Stocks, May 1,  | 2345           | 590            | 2935           |
| 05                |                |                |                |
+-------------------+----------------+----------------+----------------+
| Revised           | 6540           | 4910           | 11450          |
| Production        |                |                |                |
+-------------------+----------------+----------------+----------------+
| Deliveries, March | 6120           | 4050           | 10170          |
| --Febr.           |                |                |                |
+-------------------+----------------+----------------+----------------+
| Farm retentions   | 420            | 860            | 1280           |
+-------------------+----------------+----------------+----------------+
| Imports           | 0              | 360            | 360            |
+-------------------+----------------+----------------+----------------+
| Total supply      | 8465           | 5000           | 13465          |
+-------------------+----------------+----------------+----------------+
| Expected exports  | 1800           | 400            | 2200           |
+-------------------+----------------+----------------+----------------+
| Expected          | 4665           | 3600           | 8265           |
| consumption       |                |                |                |
+-------------------+----------------+----------------+----------------+
| Ending stocks     | 2000           | 1000           | 3000           |
+-------------------+----------------+----------------+----------------+

We can also supply a 2006/07 scenario based on the second official crop
estimate, in this table it shows that white corn supplies should be
sufficient to carry through the 2006/07 marketing year and allow for
some exports. The higher price levels are likely to suppress domestic
and regional demand. White corn conforming to South Africa's Biotech
requirements will be hard to find in the world market. If the situation
becomes tight imports can always be milled near the ports restricting
whole grain movement. The South African industry is, however, finding it
more and more difficult to effectively separate Biotech and non-Biotech
corn and with cross contamination both in the fields and in the handling
equipment it will soon become difficult to supply non-Biotech
certification. Yellow corn supplies will be tight but the shortfall can
be made up by suitable Biotech imports from Argentina. From January to
March 24, 247,385 tons were imported and unloaded in the ports of Cape
Town, Port Elizabeth, East London and Durban.

The following table contains the details:

  ----------------- ----------------- ----------------- -----------------
  FAS 2005 forecast MY May 06/April   Commercial S&D    '000 MT
                    07                                  

  1,000 MT          White             Yellow            Total

  B/Stocks          2000              1000              3000

  Crop estimate     3670              2390              6060

  Farm retentions   120               390               510

  Expected          3550              2000              5550
  Deliveries                                            

  Imports           0                 750               750

  Supply            5550              3750              9300

  Exports           700               50                750

  Consumption       4700              3550              8250

  E/Stock           150               150               300
  ----------------- ----------------- ----------------- -----------------

# The low ending stocks shown is not a concern as irrigation farmers will be encouraged by the higher price levels and plant early to enjoy the higher prices. 

# **Trade**

In the meantime exports continue unabated with about 130,000 tons
exported in the first three weeks of March. Zimbabwe continues to be the
main market taking 58% of white corn exports through March 24 and is
averaging about 88,000 tons per month. Both Malawi and Zambia is
expected to pick up their rate of imports substantially to avert famine.
Current high price levels and clogged supply lines are slowing down the
process. The high prices also killed off the possibility of major
overseas sales as well as dampening the World Food Program's appetite
for South African corn.

The following table shows South Africa's 2005/06-corn trade to date.

  ------------ ----------- ----------- ----------- ----------- -------------------
  Exports      03/4-10     03/11-17    03/18-24                05/04/03-06/03/24

  White Corn                                                   

  Angola       818                                             14 162

  Benin                                                        2 278

  Botswana     1925        1952        2632                    160 536

  Cameroon                                                     2 743

  Chad                                                         151

  Ghana                                                        7 638

  Kenya                                                        33 614

  Lesotho      2830        2642        2156                    75 382

  Madagascar                                                   967

  Malawi       3369        3525        6429                    63 335

  Mali                                                         2 258

  Mozambique   2475        2486        3840                    128 899

  Namibia      3103        990         2904                    48 843

  Sudan                                                        28 272

  Swaziland                413         543                     22 154

  Tanzania                                                     10 000

  Zambia       5505        4852        3151                    74 139

  Zimbabwe     43948       13928       7270                    949 843

  Total        63973       30878       28925                   1 625 214

                                                               

  Yellow                                                       

  Angola                                                       204

  Botswana     358         481         445                     19 918

  Indonesia                                                    49 500

  Iran                                                         93 284

  Japan                                                        113 098

  Lesotho                                                      1 647

  Malawi       151         90                                  359

  Mozambique   976         254                                 9 445

  Namibia      871         70          209                     16 495

  Swaziland    824         760         352                     30 601

  Zambia                                                       189

  Zimbabwe     603         728         823                     8 437

  Total        3783        2383        1829                    343 177

                                                               

  Grand total  67456       33261       30754                   1 968 391

                                                               

  Imports                                                      

  Yellow corn                                                  

  Argentina    5691        20420       14770                   247 385

                                                               
  ------------ ----------- ----------- ----------- ----------- -------------------

We can also supply a calendar year trade matrix but the official SA
Revenue Service data published recently contains some anomalies that
need to be rectified. As the SARS figures as supplied by the World Trade
Atlas (WTA) is for the Southern African Customs Union it does not
include sales to the union members Botswana, Lesotho, Namibia and
Swaziland. This must thus be added to the SARS data. In the meantime we
can compare the SAGIS and SARS figures for CY 2005.

+--------------+--------------+-------------+--------------+----------+
| CY 2005 Corn | White        | Yellow      | Total        | Total    |
| Exports      |              |             |              |          |
|              |              |             | SAGIS        | SARS     |
+--------------+--------------+-------------+--------------+----------+
| Total        | 1,521,852    | 334,079     | 1,855,931    | 2        |
|              |              |             |              | ,949,965 |
+--------------+--------------+-------------+--------------+----------+
| Zimbabwe     | 867,478      | 1,910       | 869,388      | 1        |
|              |              |             |              | ,443,747 |
+--------------+--------------+-------------+--------------+----------+
| Botswana     | 168,736      | 15,093      | 183,829      | Na       |
+--------------+--------------+-------------+--------------+----------+
| Mozambique   | 127,893      | 7,488       | 135,581      | 155,334  |
+--------------+--------------+-------------+--------------+----------+
| Japan        | 0            | 113,098     | 113,098      | 474,836  |
+--------------+--------------+-------------+--------------+----------+
| Lesotho      | 92,695       | 4,649       | 97,344       | Na       |
+--------------+--------------+-------------+--------------+----------+
| Iran         | 0            | 93,284      | 93,284       | 72,000   |
+--------------+--------------+-------------+--------------+----------+
| Namibia      | 60,460       | 16,477      | 76,937       | Na       |
+--------------+--------------+-------------+--------------+----------+
| Swaziland    | 27,833       | 31,839      | 59,672       | Na       |
+--------------+--------------+-------------+--------------+----------+
| Indonesia    | 0            | 49,500      | 49,500       | 49,500   |
+--------------+--------------+-------------+--------------+----------+
| Kenya        | 42,099       | 0           | 42,099       | 83,143   |
+--------------+--------------+-------------+--------------+----------+
| Malawi       | 36,889       | 0           | 36,889       | 85,015   |
+--------------+--------------+-------------+--------------+----------+
| Sudan        | 28,272       | 0           | 28,272       | 0        |
+--------------+--------------+-------------+--------------+----------+
| Angola       | 23,443       | 741         | 24,184       | 42,015   |
+--------------+--------------+-------------+--------------+----------+
| Zambia       | 21,139       | 0           | 21,139       | 55,806   |
+--------------+--------------+-------------+--------------+----------+
| Tanzania     | 10,000       | 0           | 10,000       | 107      |
+--------------+--------------+-------------+--------------+----------+
| Ghana        | 7,638        | 0           | 7,638        | 249,901  |
+--------------+--------------+-------------+--------------+----------+
| Benin        | 2,278        | 0           | 2,278        | 149,870  |
+--------------+--------------+-------------+--------------+----------+
| Mali         | 2,258        | 0           | 2,258        | 2,688    |
+--------------+--------------+-------------+--------------+----------+
| Cameroon     | 1,774        | 0           | 1,774        | 33,135   |
+--------------+--------------+-------------+--------------+----------+
| Madagascar   | 967          | 0           | 967          | 2,543    |
+--------------+--------------+-------------+--------------+----------+
| Others       | 0            | 0           | 0            | 50,325   |
+--------------+--------------+-------------+--------------+----------+

SAGIS: BLNS Sales only

  ----------------- ----------------- ----------------- -----------------
  Botswana          168 736           15 093            183 829

  Lesotho           92 695            4 649             97 344

  Namibia           60 460            16 477            76 937

  Swaziland         27 833            31 839            59 672

  Total             349 724           68 058            417 782
  ----------------- ----------------- ----------------- -----------------

#### **Prices**

The main reason for the production cutback this year was the low SAFEX
prices after harvest in 2005. In June 2005 both white and yellow corn
prices for August, October and December were well below \$100/ton, or
R600/ton at the current exchange rate. This was due to the usual post
harvest price slump and the commercial crop estimate of 12 million tons
at that stage implying a big surplus. Farmers claimed that the \$100/ton
was below their cost of production and decided to cut back the area
planted in 2005. This had a major effect on SAFEX prices. SAFEX is a
volatile market with the March 06 white corn price nearly doubling from
June to December 2005 and the yellow corn price increasing by 50%.

The following table shows current SAFEX futures prices.

+-----------+-------------+-------------+-------------+-------------+
| Rand/MT   | US\$/MT     |             |             |             |
+-----------+-------------+-------------+-------------+-------------+
| White     | December 05 | #           | August 05   | October 05  |
| corn      |             | ## March 06 |             |             |
+-----------+-------------+-------------+-------------+-------------+
| 06/27/05  | R634=\$94.5 | R670=\$99.9 | R574=\$85.5 | R593=\$88.4 |
+-----------+-------------+-------------+-------------+-------------+
| 07/27/05  | R           | R           | R           | R           |
|           | 671=\$100.9 | 709=\$106.6 | 619=\$122.6 | 632=\$107.8 |
+-----------+-------------+-------------+-------------+-------------+
| 08/31/05  | R           | R           | ##          | R           |
|           | 735=\$114.0 | 766=\$118.8 | #### May 06 | 695=\$107.8 |
+-----------+-------------+-------------+-------------+-------------+
| 09/30/05  | R           | R           | R           | R           |
|           | 847=\$133.4 | 868=\$136.7 | 867=\$136.5 | 823=\$129.6 |
+-----------+-------------+-------------+-------------+-------------+
| 11/03/05  | R           | R           | R           | ## July 06  |
|           | 834=\$125.4 | 851=\$128.0 | 856=\$128.7 |             |
+-----------+-------------+-------------+-------------+-------------+
| 11/30/05  | R           | R           | R           | R           |
|           | 959=\$147.5 | 978=\$150.5 | 975=\$150.0 | 980=\$150.8 |
+-----------+-------------+-------------+-------------+-------------+
| 12/27/05  | September   | R1          | R1          | R1          |
|           | 06          | 227=\$193.2 | 204=\$189.6 | 195=\$188.2 |
+-----------+-------------+-------------+-------------+-------------+
| 01/26/06  | R1          | R1          | R1          | R1          |
|           | 110=\$185.0 | 076=\$179.3 | 075=\$179.2 | 091=\$181.8 |
+-----------+-------------+-------------+-------------+-------------+
| 03/06/06  | R1          | December 06 | R1          | R1          |
|           | 150=\$187.0 |             | 120=\$182.1 | 132=\$184.1 |
+-----------+-------------+-------------+-------------+-------------+
| 03/29/06  | R1          | R1          | R1          | R1          |
|           | 183=\$189.3 | 212=\$193.9 | 152=\$184.3 | 164=\$186.2 |
+-----------+-------------+-------------+-------------+-------------+
|           |             |             |             |             |
+-----------+-------------+-------------+-------------+-------------+
| Yellow    | December 05 | #           | August 05   | October 05  |
| corn      |             | ## March 06 |             |             |
+-----------+-------------+-------------+-------------+-------------+
| 06/27/05  | R669=\$99.7 | R           | R607=\$90.5 | R629=\$93.7 |
|           |             | 705=\$105.1 |             |             |
+-----------+-------------+-------------+-------------+-------------+
| 07/27/05  | R           | R           | R625=\$94.0 | R635=&95.5  |
|           | 667=\$100.3 | 697=\$104.8 |             |             |
+-----------+-------------+-------------+-------------+-------------+
| 08/31/05  | R           | R           | ##          | R645=\$100  |
|           | 683=\$105.9 | 708=\$109.8 | #### May 06 |             |
+-----------+-------------+-------------+-------------+-------------+
| 09/30/05  | R           | R           | R           | R           |
|           | 772=\$121.6 | 780=\$122.8 | 786=\$123.8 | 755=\$118.9 |
+-----------+-------------+-------------+-------------+-------------+
| 11/03/05  | R           | R           | R           | ## July 06  |
|           | 777=\$116.8 | 789=\$118.6 | 801=\$120.9 |             |
+-----------+-------------+-------------+-------------+-------------+
| 11/30/05  | R           | R           | R           | R           |
|           | 797=\$122.6 | 804=\$123.7 | 837=\$128.8 | 814=\$125.2 |
+-----------+-------------+-------------+-------------+-------------+
| 12/27/05  | September   | R           | R1          | R1          |
|           | 06          | 995=\$156.7 | 005=\$158.3 | 005=\$158.3 |
+-----------+-------------+-------------+-------------+-------------+
| 01/26/06  | R           | R           | R           | R           |
|           | 975=\$162.5 | 970=\$161.7 | 964=\$160.7 | 960=\$160.0 |
+-----------+-------------+-------------+-------------+-------------+
| 03/03/06  | R1          | December 06 | R           | R           |
|           | 000=\$162.6 |             | 993=\$161.5 | 995=\$161.8 |
+-----------+-------------+-------------+-------------+-------------+
| 03/29/06  | R1          | R1          | R1          | R1          |
|           | 045=\$167.2 | 072=\$171.5 | 030=\$164.8 | 029=\$164.6 |
+-----------+-------------+-------------+-------------+-------------+

**WHEAT**

  ------------------- --------- --------- --------- ---------- --------- ----------
  PSD Table                                                              

  Country             South                                              
                      Africa                                             

  Commodity           Wheat                                              

  1000 HA             2004      Revised   2005      Estimate   2006      Forecast

  1000 MT             USDA      Post      USDA      Post       USDA      Post
                      \[Old\]   \[New\]   \[Old\]   \[New\]    \[Old\]   \[New\]

  Market Year Begin             10/2004             10/2005              10/2006

  Area Harvested      830       830       800       801        0         821

  Beginning Stocks    598       598       560       594        560       500

  Production          1680      1680      1800      1886       0         1800

  TOTAL Mkt. Yr.      1396      1395      1300      1100       0         1100
  Imports                                                                

  Jul-Jun Imports     1407      1350      1300      850        0         1100

  Jul-Jun Import U.S. 270       265       0         250        0         0

  TOTAL SUPPLY        3674      3673      3660      3580       560       3400

  TOTAL Mkt. Yr.      324       325       350       325        0         325
  Exports                                                                

  Jul-Jun Exports     338       350       350       325        0         320

  Feed Dom.           10        9         10        10         0         15
  Consumption                                                            

  TOTAL Dom.          2790      2754      2750      2755       0         2760
  Consumption                                                            

  Ending Stocks       560       594       560       500        0         315

  TOTAL DISTRIBUTION  3674      3673      3660      3580       0         3400
  ------------------- --------- --------- --------- ---------- --------- ----------

Production

The Crop Estimates Committee published the first planting intentions
survey on March 23. Farmers indicated that they intended to plant
820,900 ha. to wheat later this year, 2.5% more than the 800,500 ha.
planted in 2005. Given the big areas of fallow land in the Free State
and Northwest and the high soil moisture levels the small increase is a
bit disappointing but farmers have now learnt to produce for a market.
Price competition from imported wheat is fierce mainly due to the strong
SA Rand.

The 820,000 ha. to be planted is likely to produce about 1.8 million
tons, well short of domestic needs of nearly 2.8 million tons and the
big imports are expected to continue.

Consumption

Milling for the human market increased by 3.1% from 2.653 million tons
in 2003/04 to 2.736 million tons in 2004/05. From October to February
2005/06 milling amounted to 1.104 million tons, 1% more than in the
corresponding months in 2004/05. Growth is slow and barely keeps pace
with population growth.

Trade

In MY 2003/04 South Africa exported 158,000 tons of South African wheat
and flower and 220,000 tons of imported wheat for a total of 378,000
tons. In MY 2004/05 exports of local stocks also amounted to 158,000
tons while exports from imported stocks amounted to 168,000 tons for a
total of 326,000 tons. In 2003/04 imports for own use amounted to 1.042
million tons and for re-export 236,000 tons to total 1.278 million tons.
In 2004/05 imports for own use amounted to 1.227 million tons and
168,000 tons for re-export to total for 1.395 million tons. Imports and
exports for the current season from October 2005 to March 24, 2006
follow:

  -------------- -------------- -------------- -------------- --------------
  Exports        MT             Imports        For Africa     For South
                                                              Africa

  Botswana       31,898         USA            19,674         77,127

  Lesotho        48,896         Australia      0              59,927

  Namibia        7,727          Argentina      12,597         134,088

  Swaziland      19,106         Germany        41,768         136,158

  Zambia         23,202         Ukraine        0              60,754

  Total          130,829        Total          74,039         468,054
  -------------- -------------- -------------- -------------- --------------

Prices

Current SAFEX futures market prices are:

  -------------- --------------- --------------- --------------- ---------------
  Rand/MT \$/MT  May 06          July 06         September 06    December 06

  03/30/2006     R1430=\$228.8   R1443=\$230.9   R1470=\$235.2   R1400=\$224.0

                                                                 
  -------------- --------------- --------------- --------------- ---------------