Required Report - public distribution

**Date:** 8/16/2004

**GAIN Report Number:** SF4031

SF4031

**South Africa, Republic of**

**Planting Seeds**

**Annual**

**2004**

**Approved by:**

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

U.S. Embassy

**Prepared by:**

Patricia Mabiletsa

**Report Highlights:**

South Africa\'s 2003/4 seed crop is expected to increase from last year
because of improved weather conditions, reduced carry-over stocks, and
adaptation of the industry to the increased value of the Rand. Experts
are predicting shortages of several horticultural species because of
drought in some areas. Lucerne seed harvest is expected to increase to
about 500 MT. SANSOR is encouraging the government to rephrase the
quality regulations for imported grains, and to increase the kernel
size, thereby eliminating the use of undesirable small kernels.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Pretoria \[SF1\]

\[SF\]

**EXECUTIVE SUMMARY**

South Africa's 2003/4 seed crop is expected to increase from last year
because of improved weather conditions, reduced carry-over stocks, and
adaptation of the industry to the increased value of the Rand.

Experts are predicting shortages of several horticultural species
because of drought in some areas. A worldwide over-supply of most
horticultural seed varieties eventually started to subside during 2003/4
and was followed by increasing international prices.

Lucerne seed harvest is expected to increase to about 500 MT in 2003/4
because of expanded area planted.

The South African National Seed Organization (SANSOR) plans to expand
seed production to new areas - Lutziville, Vredendal and Koekenaap --
because of their potential and disease-free status.

SANSOR is encouraging the government to rephrase the quality regulations
for imported grains, and to increase the kernel size, thereby
eliminating the use of undesirable small-sized kernels.

In 2003/4, SANSOR will establish and standardize relevant methodology
necessary to address kernel size and grain color correlation between
commercial and experimental milling.

# AGRONOMY

South Africa's 2003/4 seed crop is expected to increase from last year
because of improved weather conditions, reduced carry-over stocks, and
adaptation of the industry to the increased value of the Rand. The
industry will also address various issues that will have a major impact
on the future of the agronomic seed businesses.

A breakthrough within the seed industry is the requirement made to the
seed companies to release detailed seed sale statistics to clients and
stakeholders. This move is expected to bring about accuracy to the
industry seed data bank.

In 2003, the South African seed growers suffered from drought in all
summer and winter rainfall regions, low commodity prices due to the
strengthening of the Rand compared to a Dollar, and high levels of
carry-over stocks. In relation to the poor growing season, SANSOR
encouraged the government to rephrase the quality regulations for
imported grains, and to increase the kernel size thereby eliminating the
use of undesirable small-sized kernels. In the same year, the industry
published a list of undesired white maize seeds varieties because the
millers were dissatisfied about working with small seed varieties.
However, Grain South Africa suggested that the matter should be handled
with caution and to remove only seriously low quality varieties from the
milling industry.

**HORTICULTURE**

Experts are predicting shortages of several horticultural species
because of drought in some areas. A worldwide over-supply of most
horticultural seed varieties eventually started to subside during 2003/4
and was followed by increasing international prices.

Because of the oversupply, the seed companies were relying heavily on
the availability of seed in stock so there was much less new seed in
production.

The strengthening of the Rand against all major currencies brought huge
relief for importers of high value F1 seeds. However, this savings came
with the cost of exporting companies who experienced declines in both
turnover and margins.

**FORAGES**

Lucerne seed harvest is expected to increase to about 500 MT in
2003/2004 season because of expanded area planted. The Lucerne Seed
Organization will adopt a new name, the National Lucerne Organization
(NLO), following the introduction of statutory measures that also
enables the NLO to collect information on seed sales and register all
producers of hay and seed. The national trials for Lucerne seed will be
conducted at Elsenburg, Upington, and Hartswater.

The Plant Improvement Act is expected to implement ISTA's rule on the
minimum seed quality requirement for White Buffalo grass, Rhodesgrass,
and Smuts Finger grass, which will result in a lower expression of
germination capacity.

The 2003 season was extremely tough for SANSOR's forage division because
of shortages in ryegrass and other various crops. South Africa ended up
with huge imports. High prices of maize also resulted in increased
demand for alternative substitutes in forage and pasture seed. Farmers'
increased diversification of livestock caused further forage shortages.

**Production**

Planting Season: Start 1^st^ March -- End 28^th^ February next year.

  ------------- ------------ ----------- ------------------ ------------- ----------- ------------ ------------ -----------
  **AGRONOMIC                            **HORTICULTURAL-                             **FORAGE -                
  SEEDS -2003**                          2003**                                       2003**                    

  **CROP**      **Sales      **Sales     **CROP**           **Sales       **Sales     **CROP**     **Sales      **Sales
                Volume       Value (R.                      Volume (MT)** Value (R.                Volume       Value (R.
                (MT)**       Mil)**                                       Mil)**                   (MT)**       Mil)**

  Maize         25,066       601.6       Pea                900           6.0         Oats         6,000        20.0

  Sunflower     2,280        84.0        Garden Bean        275.0         16.1        Triticale    3,000        7.5

  Grain Sorghum 595          8.9         Carrot             121.0         20.0        Rye          1,500        6.0

  Dry beans     4,200        51.4        Cucurbits          93.0          26.1        Forage       1,200        5.4
                                                                                      sorghum                   

  Soya beans    3,510        28.1        Sweetcorn          70.0          17.0        Lupins       1,000        2.8

  Groundnuts    3,126        18.8        Beet               41.0          7.5         Pearl Millet 700          3.9

  Cotton        260          3.1         Onions             37.0          35.1        Cowpeas      600          21.0

  Cowpeas       600          2.4         Spinach/Swiss      18.0          0.8         Lucerne      600          4.0
                                         Chard                                                                  

  Wheat         27,082       95.3        Brassicas          15.3          32.0        Teff         400          5.0

  Barley        8,408        19.2        Peppers            12.0          25.0        Perennial    200          6.0
                                                                                      ryegrass                  

  Tobacco       0,07         0.8         Watermelon         9.0           3.5         Fodder       70           1.3
                                                                                      Radish                    

  **Total**     **75,127**   **913.6**   **Total**          **1,591.3**   **189.1**   **Total**    **9,270**    **82.9**

  **Total       0            **0**       **Total unlisted** **26.1**      **80.8**    **Total      **7,727**    **38.2**
  unlisted**                                                                          Unlisted**                

  **Grand       **75,127**   **913.6**   **Grand Total**    **1,617.4**   **269.9**   **Grand      **16,997**   **121.1**
  Total**                                                                             Total**                   
  ------------- ------------ ----------- ------------------ ------------- ----------- ------------ ------------ -----------

**Source: SANSOR (In 2003, \$1= R7.56)**

The winter crop estimates for the 2003/4 season, released by 05 May
2004, indicate wheat of about 1.485 Million MT, including about 22,000
MT wheat still to be delivered until the end of September 2004 (SANSOR),
a total estimates at 1.507 million. The NDA figures indicate retention
of about 33,000 MT.

Estimated area for wheat under irrigation is about 112,500 Ha with an
estimated yield of about 5.20 MT/Ha, while the dryland area is estimated
at about 635,000 Ha with a yield of 1.50 MT/Ha.

**BACKGROUND**

The South African International Society of Seed Technologist Chapter
(IST), established in March 2003 and formed by all 14 members of the
SANSOR Seed Analysts of South Africa (1989), handles the seed trade and
also works to improve international trade. In 2003/04, the IST expects
to be well established with membership including extension, research,
and teaching professionals. The first annual meeting will be launched at
an unscheduled date later this year.

**Plant Health Regulations**

SANSOR works directly with the government on Sanitary and Phytosanitary
(SPS) issues for seed and grain. A development reached in the agronomic
sector in 2003/4 was a special measure to curb the spread of *Karnal
Bunt* in wheat. In South Africa, *Karnal Bunt* only affects the Northern
Cape.

Members of South Africa's seed production sector joined forces to
initiate research on ways to prevent further outbreaks of *Pseudomonas*
in onions.

The time taken to handle small airmail seed parcels at Customs has been
resolved using a case-by-case individual testing method. A member of the
Directorate of Plant and Quality Control from the NDA will be part of
the monitoring committee to handle phytosanitary constraints for both
import and exports.

The dispute among seed companies for using duplicate names and numbers
for varieties belonging to different companies has finally been
resolved.

# Seed Certification

In the beginning of 2003/4, the South African Seed Certification Scheme
was updated to be in line with international standards. SANSOR
secretariat will now be responsible for updating and issuing
authorization cards, stating particulars of inspectors, company, and
crops, etc.

In early 2003/4, the International Maize and Wheat Improvement Centre
(CIMMYT) held discussions with the Agricultural Research Council (ARC)
about the maintenance of South Africa's native varieties, which had been
increasingly affected by open pollination, especially for maize and
groundnuts. The following temporary measures will be implemented in
future to offset the above problem - shortening of the production chain,
inspection of pre-basic seed units by the breeder, and monitoring of a
percentage of basic and certified seed units by SANSOR technical
personnel assisted by the breeder/expert.

In 2003/04, SANSOR participated in the OECD experiment sampling - that
included fastening, labeling, and seed analysis. The test resulted in
South Africa deviating with only about 1.7% from the 112 samples drawn,
as compared to the participating countries.

SANSOR plans to expand seed production to new areas - Lutziville,
Vredendal and Koekenaap -- because of their potential and disease-free
status.

Five forage seed companies received Plant Breeders Licenses in 2003.

**Intellectual Property Rights (Plant Variety Protection/Plant
Patents)**

The Intergovernmental Committee on Intellectual Property, Genetic
Resources, Traditional Knowledge and Folklore of the World Intellectual
Property Organization (WIPO) held its fifth session at the beginning of
this season. Suggestions made were a draft of a legal international
document on intellectual property, traditional knowledge and Folklore.
Possible requirements to state origin of genetic resources in patent
applications were also addressed.

South Africa ratified the Biosafety Protocol in August 2003, and
implemented from September 2003. We expect that South Africa's GMO Act
will be amended in the future to comply with the Biosafety Protocol.

**Variety Approval**

In 2003/4, SANSOR established and standardized relevant methodology
necessary to address kernel size and grain color correlation between
commercial and experimental milling.

The National Plant Variety List is expected to distinguish between
plants from genetically modified varieties *vs* the conventionally bred
ones. In the case of genetically modified maize, stem borer resistance
would be labeled by the hybrid name followed by the addition of "B",
while an ending letter "R" will follow the hybrid name to indicate
glycophosphate herbicides. The industry also expects to form a standing
committee that will deal with standardization of regulatory issues for
genetically modified crops.

The Directorate of Genetic Resources is the sole office with the right
to fully monitor expensive seeds. Concerns about the trade's definition
on expensive seed resulted in the adoption of a new definition that
reads; " All vegetable hybrid seed sold by count".

Other terms under discussions are 'precision seed' and 'organic seed',
and are seen as valuable marketing tools that would enable companies to
categorize and promote the marketing of their vegetable seed,
diversifying existing markets and developing new ones.

In 2003, the forage seed division of SANSOR released a new cultivar, SA
Select.

**Genetically Modified Organisms (GMO)/biotechnology**

The 2004 proposal by SANSOR is to establish a standing committee that is
responsible to implement an Insect Resistant Management (IRM) program
for insect resistant genetically modified crops.

An identity Preservation system currently developed by the South African
Bureau of Standards (SABS) is expected to cover issues like genetically
modified Organisms.

South Africa's use of modern biotechnology involve commercial virus
elimination and plant production through tissue culture of date palms,
banana, soybeans, dry beans, and others; animal artificial insemination,
embryo implants, and vaccine production for animal and human health.

According to SANSOR, South Africa has been experimenting with genetic
modification (r-DNA technologies) for over 20 years. Since 1990, the
South African Genetic Experimentation Committee (SAGENE) applied
biosafety guidelines to all GM field trials.

The GMO Act (1997) controls all facilities for genetic modification
research and development, and all field trials, container used, imports,
exports and commercial releases.

In mid-1990s, South Africa had about 110 plant biotechnology groups in
research and development involving over 160 projects. Annual investment
totals about \$12 million, with usages of GMO varieties shared amongst
45 foods, fibre and feed companies.

Since 1990, South Africa granted over 200 permits for contained and
field crops, that includes cotton, maize Lucerne, eucalyptus, apples,
canola, soybean, potato, sugarbeet, sugarcane, and arabidopsis.

The first permit for conditional commercial release was granted in 1997,
for Bt insect resistant cotton, followed by yellow maize hybrids with Bt
insect resistance in 1998, Bt insect resistant white maize and herbicide
tolerant cotton.

**Tariff Table**

  ---------- ----------------------- ---------------- ---------- -----------
  **HTS      **DESCRIPTION**         **STD DUTY       **PERMIT   **EXEMPT
  CODE**                             FORMULA**        REQ**      VAT**

  120100     Soyabeans               8%/Ad Valorem    Free       No

  120210     G.nuts(in shell)        10%/Ad Valorem   Free       No

  120220     G.nuts(shelled)         10%/Ad Valorem   Free       Yes

  120400     Linseed                 9.4%/Ad Valorem  Free       No

  120600     Sunflower seed          9.4%/Ad Valorem  Free       No

  120710     Palm nuts & Kernels     7.4%/Ad Valorem  Free       No

  120720     Cotton seeds            9.4%/Ad Valorem  Free       No

  120760     Safflower seeds         9.4%/Ad Valorem  Free       No

  120919     Beet seeds: Other       Free             Free       \-

  120921     Lucerne seed            Free             Free       \-

  120926     Timothy grass seed      Free             Free       \-

  120925     Rye grass seed          Free             Free       \-

  120924     Kentucky blue grass     Free             Free       \-
             seed                                                

  120923     Fescue seeds            Free             Free       \-

  120929     Seed of forage plants,  Free             Free       \-
             other than beet seeds:                              
             other                                               

  120991     Vegetable seeds         Free             Free       \-

  12099910   Other sowing seeds:     Free             Free       \-
             Other                                               

  12099990   Other seeds, fruits &   Free             Free       \-
             spores: Other                                       

  100510     Maize( Corn) seed       Free             Free       \-

  100300     Barley                  Free             Free       \-

  100110     Durum Wheat             Free             Free       No

  100400     Oats                    Free             Free       No

  100700     Grain Sorghum           3%/Ad Valorem    Free       No
  ---------- ----------------------- ---------------- ---------- -----------

**Source: South African Customs Tariffs Book**

**Note:** The seed HTS is 1209, the rest are grains and oilseeds (for
consumption) included herein for your interest.

**TRADE**

+---------+-----------------------------+--------------+--------------+
| ###     |                             |              |              |
| ### Sou |                             |              |              |
| th Afri |                             |              |              |
| ca's Im |                             |              |              |
| port of |                             |              |              |
|  seeds  |                             |              |              |
+---------+-----------------------------+--------------+--------------+
| **HTS   | **DESCRIPTION**             | 2002         | **2003**     |
| CODE**  |                             |              |              |
|         |                             | (MT)         | **(MT)**     |
+---------+-----------------------------+--------------+--------------+
| 120925  | Rye Grass seed              | 491.4        | 763.3        |
+---------+-----------------------------+--------------+--------------+
| 120929  | Other seeds of forage       | 542.2        | 763.2        |
|         | plants                      |              |              |
+---------+-----------------------------+--------------+--------------+
| 120991  | Vegetable seeds             | 571.8        | 391.9        |
+---------+-----------------------------+--------------+--------------+
| 120921  | Lucerne (Alfalfa) seeds     | 135.9        | 372.3        |
+---------+-----------------------------+--------------+--------------+
| 120999  | Other seeds                 | 277.2        | 274.3        |
+---------+-----------------------------+--------------+--------------+
| 120923  | Fescue seed                 | 66.3         | 113.8        |
+---------+-----------------------------+--------------+--------------+
| 120922  | Clover seed                 | 104.2        | 81.8         |
+---------+-----------------------------+--------------+--------------+
| 120930  | Seed of herbaceous plants   | 11.4         | 9.5          |
+---------+-----------------------------+--------------+--------------+
| 120924  | Kentucky Blue Grass seeds   | 3.4          | 5.4          |
+---------+-----------------------------+--------------+--------------+
| 120910  | Sugar Beet Seeds            | 2.2          | 2.3          |
+---------+-----------------------------+--------------+--------------+
| 120919  | Beet Seed, not sugar        | 2.7          | 1.5          |
+---------+-----------------------------+--------------+--------------+
| 120926  | Timothy Grass seeds         | 0.4          | 0            |
+---------+-----------------------------+--------------+--------------+
| **      | **All seeds listed**        | **2209.1**   | **2779.3**   |
| TOTAL** |                             |              |              |
+---------+-----------------------------+--------------+--------------+

**Source: WTA**

South African seeds imports were dominated by the grasses, followed by
forage plants, vegetables and Lucerne in 2003.

The United States is one of the main South African seed suppliers for
herbaceous plants, Lucerne, Rye grass, other seed of the forage plants,
other seeds, vegetables, sugar beet, Kentucky blue grass, Beet seed (not
sugar), clover and fescue seeds. In 2003, U.S. seed exports to South
Africa reached about 560 MT, and amounted to \$4.8 million, an increase
in volume (84%) and value (\$1.08 million) from 2002.

The Netherlands followed with a market share of about \$4.02 million in
2003 mainly for herbaceous, vegetables, Kentucky Blue grass, Fescue
grass, Rye grass, other forage plants and other seeds. Total seed
imports increased by \$0.93 million from 2002.

Australian seed exports (vegetables, Rye grass, Fescue grass, Clover,
Other forage plants and other seeds) to South Africa reached about 865
MT and amounted to \$2.33 million, an increase of 36% in volume and
value (\$1.05 million) from 2002.

Exchange Rate: In 2002: \$1 = R10.52; In 2003: \$1 = R7.56

+---------+-----------------------------+--------------+--------------+
| ###     |                             |              |              |
| ### Sou |                             |              |              |
| th Afri |                             |              |              |
| ca's Ex |                             |              |              |
| ports o |                             |              |              |
| f seeds |                             |              |              |
+---------+-----------------------------+--------------+--------------+
| **HTS   | **DESCRIPTION**             | 2002         | **2003**     |
| CODE**  |                             |              |              |
|         |                             | (MT)         | **(MT)**     |
+---------+-----------------------------+--------------+--------------+
| 120999  | Other seeds                 | 4,593.8      | 3,956.5      |
+---------+-----------------------------+--------------+--------------+
| 120991  | Vegetable seeds             | 1,542.0      | 778.3        |
+---------+-----------------------------+--------------+--------------+
| 120921  | Lucerne (Alfalfa) seeds     | 305.2        | 596.2        |
+---------+-----------------------------+--------------+--------------+
| 120929  | Other seeds of forage       | 1,864.5      | 300.8        |
|         | plants                      |              |              |
+---------+-----------------------------+--------------+--------------+
| 120925  | Rye Grass seed              | 0            | 60.5         |
+---------+-----------------------------+--------------+--------------+
| 120926  | Timothy Grass seeds         | 19.9         | 0.7          |
+---------+-----------------------------+--------------+--------------+
| 120919  | Beet Seed, not sugar        | 32.8         | 0.3          |
+---------+-----------------------------+--------------+--------------+
| **      | **All seeds listed**        | **8358.2**   | **5693.3**   |
| TOTAL** |                             |              |              |
+---------+-----------------------------+--------------+--------------+

**Source: WTA**

South Africa exports seeds mainly to the neighboring African states,
namely: Malawi, Angola, Zimbabwe, Zambia, Mozambique, with a fair amount
reaching Saudi Arabia, U.S., Japan, U. A. Emirates, Canada and
Netherlands. The major seed exports are Timothy grass, Herbaceous
Plants, Rye grass, Lucerne, vegetables, other forage plants, beet
seed-not sugar, and others.