Required Report - public distribution

**Date:** 2/7/2007

**GAIN Report Number:** SF7003

SF7003

**South Africa, Republic of**

Grain and Feed

**Annual**

2007

**Approved by:**

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

#### South Africa

**Prepared by:**

Herman Germishuis

**Report Highlights:**

After a 2005 cutback in corn production producer prices recovered aided
by the international price increases. This led to a resurrection in corn
production with the area planted increasing by more than a million
hectare in 2006. At the moment weather conditions are critical in the
western production area with rains urgently needed. The crop is
nonetheless expected to exceed 10 million tons. The optimistic scenario
is expected to continue for the crop to be planted later this year. The
2006 wheat crop also increased on the previous year although imports of
wheat and rice are continuing unabated.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Pretoria \[SF1\]

\[SF\]

###### Summary {#summary-1}

In an effort to balance corn supply and demand South African farmers cut
the area planted to corn from 3.2 million hectares (ha.) in 2004 to 2
million ha. in 2005. As a result the total crop declined from 11.7
million tons to 6.9 million tons. In 2006 the farmers increased the area
planted to about 3.1 million ha. again creating the potential for a 10
million ton crop. Weather conditions over the next two weeks, will
however, play a major role in determining the size of the crop, as it is
currently dry and hot in the western production areas.

Bio Fuel, including ethanol from corn, is a big issue but no additional
areas were planted for this purpose in 2006. It could, however, become a
major additional outlet in the future.

US\$1 = Rand 7.25 (02/07/07

Sources:

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

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

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

[**www.fews.net**](http://www.fews.net/)

[**www.wfp.org**](http://www.wfp.org/)

###### Wheat

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

  **Country**     **South                                                                                    
                  Africa**                                                                                   

  **Commodity**   **Wheat**                                                                                  

  1000 HA         2005        Revised                2006       Estimate               2007       Forecast   

  1000 Mt         USDA\       Post\      Post\       USDA\      Post\      Post\       USDA\      Post\      Post\
                  Official    Estimate   Estimate\   Official   Estimate   Estimate\   Official   Estimate   Estimate\
                                         New                               New                               New

  **Market Year               10/2005    10/2005                10/2006    10/2006                10/2007    10/2007
  Begin**                                                                                                    

  Area Harvested  800         805        805         770        765        765         0          0          800

  Beginning       574         594        594         583        592        592         573        611        600
  Stocks                                                                                                     

  Production      1886        1905       1905        2190       2169       2162        0          0          2100

                                                                                                             

  MY Imports      1211        1211       1211        1000       1000       996         0          0          1000

  TY Imports      1242        1242       1242        1000       1000       1000        0          0          1000

  TY Imp. from    157         157        115         0          0          0           0          0          0
  U.S.                                                                                                       

  Total Supply    3671        3710       3710        3773       3761       3750        573        611        3700

  MY Exports      281         278        278         350        300        300         0          0          325

  TY Exports      296         296        296         350        300        350         0          0          0

  Feed            10          25         20          10         10         10          0          0          25
  Consumption                                                                                                

  FSI Consumption 2797        2815       2820        2840       2840       2840        0          0          2850

  Total           2807        2840       2840        2850       2850       2850        0          0          2875
  Consumption                                                                                                

  Ending Stocks   583         592        592         573        611        600         0          0          500

  Total           3671        3710       3710        3773       3761       3750        0          0          3700
  Distribution                                                                                               
  --------------- ----------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- -----------

# Production

The latest official estimate of the wheat crop planted in 2006 is 2.16
million tons, 13.5% bigger than the 1.9 million tons produced in 2005.
This was achieved in spite of the cutback in area planted from 805,000
ha. in 2005 to 765,000 ha. in 2006, mainly due to better rainfall. The
following table contains the details by province:

  ------------- ---------- ------- ------------ ---------- ------- ------------
  WHEAT         2005                            2006               

                Area       Yield   Production   Area       Yield   Production
                planted                         planted            

                Ha.        Mt/ha   Mt.          Ha.        Mt/ha   Mt.

  Western Cape  302,000    2.1     645,000      285,000    2.5     712,500

  N. Cape       48,500     6.3     306,000      42,000     6.2     260,400

  Free State    380,000    1.5     580,000      360,000    2.3     810,000

  E. Cape       4,000      3.6     14,500       2,500      3.5     8,750

  KwaZulu       9,000      4.6     41,500       6,800      4.5     30,600

  Mpumalanga    18,000     5.1     92,000       15,000     5.5     82,500

  Limpopo       11,000     5.3     580,000      22,000     4.5     99,000

  Gauteng       2,500      5.6     14,000       2,000      5.4     10,800

  North West    30,000     5.4     162,000      29,500     5.0     147,500

  TOTAL         805,000    2.4     1905,000     764,800    2.8     2,162,050
  ------------- ---------- ------- ------------ ---------- ------- ------------

The higher average yields are mainly produced under irrigation, the
Western Cape and the Free State are the two only two big dry land areas.
The increased yield in the Free State is partly due to fallow land from
the previous season being planted in the current season.

# Consumption

The final PS&D's for the past two seasons are shown in the following
table:

  ------------ ---------- ---------- ---------- ---------- ---------- ----------
               Oct/Sept   04/05                 Oct/Sept   05/06      

  '000 MT      Human      Feed       Total      Human      Feed       Total

  B/stocks     594        20         614        581        13         594

  Deliveries   1661       9          1670       1882       11         1893

  Imports                                                             

  for SA       1226       1          1227       1055       0          1055

  export       168        0          168        156        0          156

  Total        1394       1          1395       1211       0          1211

  Supply       3649       30         3679       3674       24         3698

  Cons.        2742       17         2759       2819       9          2828

  Exports\*    326        0          326        278        0          278

  E/stocks     581        13         594        577        15         592
  ------------ ---------- ---------- ---------- ---------- ---------- ----------

**\*** Including products

My 2006/07 and 2007/08 PS&D forecasts can be made:

  ----------------------- ----------------------- -----------------------
  1000 Mt                 Oct. 06/Sept.07         Oct. 07/Sept.08

  B/Stocks                592                     600

  Production              2162                    2100

  Imports                 996                     1000

  Supply                  3750                    3700

  Consumption             2850                    2875

  Exports                 300                     325

  E/stocks                600                     500
  ----------------------- ----------------------- -----------------------

# Trade

Imports:

  ----------- --------- ----------- ----------- --------- ----------- -----------
  MT          2004/05                           2005/06               

              For       For RSA     Total       For       For RSA     Total
              Africa                            Africa                

  Argentina   111,654   574,600     686,254     38,237    392,930     431,167

  Australia   0         154,112     154,112     0         59,927      59,927

  Brazil                                        6,301                 6,301

  Canada      0         43,766      43,766      6,826     62,643      69,469

  France                                                  9,920       9,920

  Germany     12,603    115,332     127,935     78,542    354,718     433,260

  U.K.        0         27,586      27,586                            

  Ukraine     0         29,935      29,935      0         85,979      85,979

  USA         43,078    281,165     324,243     25,982    88,651      114,633

  Total       167,335   1,226,496   1,393,831   155,888   1,054,768   1,210,656
  ----------- --------- ----------- ----------- --------- ----------- -----------

With only a 2% duty on the FOB price of wheat, import flows are high,
exceeding 1.2 million tons per season over the past two seasons.

An indication of an import parity price can be given:

+-----------------------------------+-----------------------------------+
|                                   | US HRW #2, Gulf                   |
+-----------------------------------+-----------------------------------+
| FOB value (\$/mt)                 | 197.46                            |
+-----------------------------------+-----------------------------------+
| Freight rate (20-30,000 tons)     | 51.00                             |
+-----------------------------------+-----------------------------------+
| Insurance (\$/mt)                 | 0.59                              |
+-----------------------------------+-----------------------------------+
| C.I.F.                            | 249.05                            |
+-----------------------------------+-----------------------------------+
| Converted to Rand/mt              | 1812.46                           |
+-----------------------------------+-----------------------------------+
| Financing cost (12.5% prime rate) | 18.62                             |
+-----------------------------------+-----------------------------------+
| Total                             | 1831.08                           |
+-----------------------------------+-----------------------------------+
| Discharging cost, Cape Town       | 110.00                            |
|                                   |                                   |
| Durban                            | 80.00                             |
+-----------------------------------+-----------------------------------+
| Import tariff                     | 28.74                             |
+-----------------------------------+-----------------------------------+
| F.O.R Cape Town                   | 1970                              |
+-----------------------------------+-----------------------------------+
| Durban                            | 1940                              |
|                                   |                                   |
| \+ railage to Randfontein R185    | 2125                              |
+-----------------------------------+-----------------------------------+
| Randfontein SAFEX price March     | 1800                              |
+-----------------------------------+-----------------------------------+

The import prices thus play a major role in setting the domestic price
with the imported product competitive at the coast.

Exports:

South Africa not only supplies wheat to the region but also acts as a
conduit for imported grain. In 2004/05, 135,000 tons of whole grain and
23,000 tons of products were exported to the region from own stocks. In
addition 168,000 tons of imported wheat was exported. In 2005/06 local
exports amounted to 93,000 tons of grain and 18,000 tons of products for
a total of 111,000 mt.

  ----------------------- ----------------------- -----------------------
  MT whole grain          Oct./Sept. 2004/05      Oct./Sept. 2005/06

  Botswana                77,033                  78,422

  Lesotho                 78,956                  71,071

  Namibia                 16,904                  18,902

  Swaziland               34,543                  34,046

  Zambia                  55,826                  53,118

  Zimbabwe                40,738                  2,484

  TOTAL                   301,000                 258,043
  ----------------------- ----------------------- -----------------------

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

  **Country**            South Africa                         

  **Commodity**          Wheat                                

  Time Period            Oct/Sept         Units:              Metric ton

  Imports for:           2004/05                              **2005/06**

  U.S.                   324243           U.S.                114633

  Others                                  Others              

  Argentina              686254           Argentina           431167

  Australia              154112           Australia           59927

  Brazil                 0                Brazil              6301

  Canada                 43766            Canada              69469

  France                 0                France              9920

  Germany                127,935          Germany             433260

  U.K.                   27586            U.K.                0

  Ukraine                29935            Ukraine             85979

  Total for Others       1069588                              1096023

  Others not Listed      0                                    0

  Grand Total            1393831                              1210656
  ---------------------- ---------------- ------------------- -------------

  ------------------------- ------------------ --------------- -------------
  **Exports**               South Africa                       

  **Commodity**             Wheat                              

  Time Period               Oct/Sept           Units:          MT

  Exports for:              2004/05                            **2005/06**

  U.S.                      0                  U.S.            0

  Others                                       Others          

  Botswana                  77033              Botswana        78422

  Lesotho                   75956              Lesotho         71071

  Namibia                   16904              Namibia         18902

  Swaziland                 34543              Swaziland       34046

  Zambia                    55826              Zambia          53118

  Zimbabwe                  40738              Zimbabwe        2484

  Total for Others          301000                             258043

  Others not Listed         0                                  0

  Grand Total               301000                             258043
  ------------------------- ------------------ --------------- -------------

###### Corn

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

  **Country**     **South                                                                                   
                  Africa**                                                                                  

  **Commodity**   **Corn**                                                                                  

  1000 HA         2005       Revised                2006       Estimate               2007       Forecast   

  1000 MT         USDA\      Post\      Post\       USDA\      Post\      Post\       USDA\      Post\      Post\
                  Official   Estimate   Estimate\   Official   Estimate   Estimate\   Official   Estimate   Estimate\
                                        New                               New                               New

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

  Area Harvested  2032       2032       2032        3200       3180       3200        0          0          3300

  Beginning       3190       3170       3190        1475       1410       1475        2225       2710       2225
  Stocks                                                                                                    

  Production      6935       6935       6935        10000      10500      10000       0          0          11000

  MY Imports      1000       1000       1000        500        500        500         0          0          275

  TY Imports      896        896        896         700        700        700         0          0          450

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

  Total Supply    11125      11105      11125       11975      12410      11975       2225       2710       13500

  MY Exports      750        750        750         750        750        750         0          0          1000

  TY Exports      1406       1406       1406        500        500        500         0          0          600

  Feed            4400       4415       4400        4500       4500       4500        0          0          4550
  Consumption                                                                                               

  FSI Consumption 4500       4530       4500        4500       4450       4500        0          0          4500

  Total           8900       8945       8900        9000       8950       9000        0          0          9050
  Consumption                                                                                               

  Ending Stocks   1475       1410       1475        2225       2710       2225        0          0          3450
  --------------- ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- -----------

**Production**

In an effort to balance corn supply and demand, South African commercial
farmers cut the area planted to corn from 2.8 million hectares (ha.) in
2004 to 1.6 million ha. in 2005. As a result the commercial crop
declined from 11.5 million tons to 6.6 million tons, alleviating the
oversupply situation and bolstering prices. The better producer prices
re-ignited interest in the industry, and as the cutback was not intended
to be permanent; farmers increased the area planted again this season.

The preliminary estimate of the commercial area planted to corn in 2006
(the current crop, planted in 2006 to be harvested from May 2007) is
about 2.7 million ha. 1.1 million ha. more than the area planted in 2005
but a little lower than expected.

The 2.7 million ha. planted to corn in 2006 is 3% lower than the earlier
planting intentions forecast probably due to the late and erratic
rainfall. As a result of the late rains plantings were delayed and some
were done after the optimum planting windows. El Nino conditions were
detected earlier this season and are still present. This phenomenon is
often associated with reduced rainfall over parts of South Africa
although this is not a foregone conclusion. The greatest impact is often
between January and March, when the corn reaches the pollination stage
requiring normal temperatures and ample rain. Conditions are currently
critical, especially in the western areas, with high temperatures and
erratic rainfall. General rains are needed in the next two weeks to save
the crop. Based on normal weather for the rest of the growing season the
following forecast can be made:

<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>000ha</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>000ha</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>000ha</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>Commercial</td>
<td></td>
<td>Final</td>
<td></td>
<td></td>
<td>Est.</td>
<td></td>
<td></td>
<td>Fore.</td>
<td></td>
</tr>
<tr class="odd">
<td>White</td>
<td>1,700</td>
<td>3.8</td>
<td>6,540</td>
<td>1,033</td>
<td>4.1</td>
<td>4,187</td>
<td>1710</td>
<td>3.5</td>
<td>6,000</td>
</tr>
<tr class="even">
<td>Yellow</td>
<td>1,110</td>
<td>4.4</td>
<td>4,910</td>
<td>567</td>
<td>4.3</td>
<td>2,431</td>
<td>973</td>
<td>3.85</td>
<td>3,750</td>
</tr>
<tr class="odd">
<td>Total</td>
<td>2,810</td>
<td>4.1*</td>
<td>11450</td>
<td>1,600</td>
<td>4.1*</td>
<td>6,618</td>
<td>2,683</td>
<td>3.6</td>
<td>9,750</td>
</tr>
<tr class="even">
<td>Small scale</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>346</td>
<td>0.7</td>
<td>238</td>
<td>330</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>87</td>
<td>0.6</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>417</td>
<td>0.6</td>
<td>250</td>
</tr>
<tr class="even">
<td>Total</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>1,379</td>
<td>3.2</td>
<td>4,425</td>
<td>2,040</td>
<td>3.0</td>
<td>6,200</td>
</tr>
<tr class="even">
<td>Yellow</td>
<td>1,199</td>
<td>4.1</td>
<td>4,973</td>
<td>653</td>
<td>3.8</td>
<td>2,510</td>
<td>1,060</td>
<td>3.6</td>
<td>3,800</td>
</tr>
<tr class="odd">
<td>TOTAL</td>
<td>3,224</td>
<td>3.6</td>
<td>11716</td>
<td>2,032</td>
<td>3.4</td>
<td>6,935</td>
<td>3,100</td>
<td>3.2</td>
<td>10000</td>
</tr>
</tbody>
</table>

\*Both very high yields due to a over estimate in 2004 and the cutback
in 2005 leading to only the better fields being planted under optimum
conditions.

With the possibility of a crop failure for the crop planted in 2006
increasing due to the current drought and very high temperatures, the
future looks uncertain. Domestic prices are already high and increasing
and can go through the roof if it does not rain soon. International
prices are also supporting the current high price levels. At this stage
it is not clear if a bio ethanol plant will be operational by 2008 and
no extra areas are expected to be planted this purpose in 2007.

The area to be planted later in 2007 will be influenced by the generally
higher price levels and an increase in area planted can be expected. At
this stage we can look at the possibility of a total of 3.2 million
hectare planted again producing a crop in excess of 11 million tons.
This depends on 'normal' weather over the next 15 months.

###### Consumption

Actual commercial consumption (through the silos) over the past two
seasons follows:

  ---------- ---------- ---------- ----------- ---------- ---------- ----------
  '000MT     White      Yellow     Total       White      Yellow     Total

             My         04/05      May/April   My         05/06      

  Human      3478       262        3740        3559       266        3825

  Animal     733        2694       3427        543        2985       3528

  Other      489        394        883         318        579        897

  Total      4700       3350       8050        4420       3830       8250
  ---------- ---------- ---------- ----------- ---------- ---------- ----------

As shown in the table white corn is mainly used for milling for human
consumption (about 3.5 million tons annually) and yellow corn for feed

(Also about 3.5 million tons annually under normal conditions). Some of
the yellow corn requirements can be substituted with white corn.

During MY 04/05, 733,000 tons of white corn was used for industrial and
feed consumption but this declined to 543,000 tons in MY 05/06. The use
of white corn was the result of the relative abundance of white corn and
a shortage of yellow. Based on consumption from May to December 2006,
feed use of white corn is only likely to reach 350,000 tons during the
current, My 06/07 season. This is in spite of the fact that 35% of the
deliveries graded lower than first grade and should thus be suited for
feed use. The shortfall in yellow corn is made up by imports, but with
the recent increase in world prices, this is expected to slow down,
leading to increased use of lower grade white corn for feed.

The following table contains the final MY 05/06 supply and distribution

  --------------------- --------------- ------------------ ---------------
  Corn PS&D             FAS 2004        MY2005/06          Final

  1,000 MT              White           Yellow             Total

  B/stocks              2400            745                3145

  Production            6540            4910               11450

  Retentions            430             965                1395\*

  Deliveries            6110            3945               10055

  Imports               0               360                360

  Supply                8510            5050               13560

  Exports               1785            355                2140

  Consumption           4425            3825               8250

  E/stocks              2300            870                3170
  --------------------- --------------- ------------------ ---------------

\*Implying that the crop was overestimated, normal retentions around
150,000 tons white and 350,000 tons yellow for a total of 500,000 mt.

The MY 2006/07 commercial supply and distribution scenario, based on the
latest official crop estimate, and a 2007/08 forecast is shown in the
following table.

+-----------+--------+----------+-------+---------+---------+---------+
| MY        | FAS    | MY       | Est   | FAS     | MY      | F       |
|           | 2005   | 2006/07  | imate | 2006    | 2007/08 | orecast |
| May/April |        |          |       |         |         |         |
+-----------+--------+----------+-------+---------+---------+---------+
| 1,000 MT  | White  | Yellow   | Total | White   | Yellow  | Total   |
+-----------+--------+----------+-------+---------+---------+---------+
| B/stocks  | 2300   | 870      | 3170  | 1490    | 30      | 1520    |
+-----------+--------+----------+-------+---------+---------+---------+
| P         | 4187   | 2431     | 6618  | 6000    | 3750    | 9750    |
| roduction |        |          |       |         |         |         |
+-----------+--------+----------+-------+---------+---------+---------+
| R         | 147    | 371      | 518   | 150     | 350     | 500     |
| etentions |        |          |       |         |         |         |
+-----------+--------+----------+-------+---------+---------+---------+
| D         | 4040   | 2060     | 6100  | 5850    | 3400    | 9250    |
| eliveries |        |          |       |         |         |         |
+-----------+--------+----------+-------+---------+---------+---------+
| Imports   | 0      | 1000     | 1000  | 0       | 500     | 500     |
+-----------+--------+----------+-------+---------+---------+---------+
| Supply    | 6340   | 3930     | 1     | 7340    | 3930    | 11270   |
|           |        |          | 0,270 |         |         |         |
+-----------+--------+----------+-------+---------+---------+---------+
| Exports   | 500    | 100      | 600   | 850     | 50      | 900     |
+-----------+--------+----------+-------+---------+---------+---------+
| Co        | 4350\* | 3800     | 8150  | 4400\*  | 3800    | 8200    |
| nsumption |        |          |       |         |         |         |
+-----------+--------+----------+-------+---------+---------+---------+
| E/stocks  | 1490   | 30       | 1520  | 2090    | 80      | 2170    |
+-----------+--------+----------+-------+---------+---------+---------+

> \*Additional 200,000 tons of white corn used for feed.

The table shows that there will be a substantial carry over of white
corn at the end of April 2007 (1.5 million mt.) and 2008 (2 million
mt.). The relative over supply of white corn and the under supply of
yellow corn is clear. This is illustrated by the SAFEX prices shown
below:

  ---------- --------------- --------------- --------------- ---------------
  Rand/MT    US \$/MT                                        

  White corn February 07     March 07        May 07          July 07

  01/26/07   R1390=\$193.1   R1394=\$193.6   R1378=\$191.4   R1336=\$189.7

  WOPT                                                       

  01/26/07   R1344=\$186.7   R1360=\$188.9                   

  Yellow                                                     
  corn                                                       

  01/26/07   R1575=\$218.8   R1565=\$217.4   R1435=\$199.3   R1371=\$190.4
  ---------- --------------- --------------- --------------- ---------------

March 07 white corn futures are currently selling at \$194/mt. while
yellow corn is \$217/ton, a difference of \$23/ton.

An indication of current import parity prices can be supplied.

  ----------------------- ----------------------- -----------------------
  01/19/2007; Yellow      US \# 3 Corn, Gulf      Corn, Argentina

  FOB value \$/mt         177.39                  166.00

  Freight (20-30,000 mt)  51.00                   43.00

  Insurance               0.53                    0.50

  C.I.F. (\$/mt)          228.92                  209.50

  Rand/mt                 1634.03                 1495.41

  Financing cost R/mt     16.79                   15.36

  C.I.F and finance       1650.82                 1510.77

  Discharging costs                               

  Cape Town (grabs)       110                     110

  Durban (suction)        80                      80

  Import duty             0                       0

  F.O.R. Cape Town        1761                    1621

  Durban                  1731                    1591
  ----------------------- ----------------------- -----------------------

It is clear that yellow corn can be imported to the coast at a
competitive price mainly due to the high inland transport costs, about
R185/ton from Randfontein to Durban and even more to Cape Town.

# Trade

We prefer to use SAGIS data for our trade compilations as they are
constantly corrected and updated. Exports for the past two seasons and
sales to date are shown in the following table:

  ------------------- ----------------- ------------------ ---------------
  Exports             MY 04/05          MY 05/06           MY 06/07

  WHITE CORN          May/April         May/April          May/Jan 26

  Angola              33644             14162              3742

  Benin                                 2278               

  Botswana            112683            175708             85121

  Cameroon                              3001               

  Chad                                  151                

  Congo               216                                  280

  Ghana                                 7683               

  Kenya               129451                               2792

  Lesotho             112070            82851              59392

  Madagascar          2382                                 495

  Malawi                                68204              159

  Mali                                  2258               

  Mozambique          48396             138702             27346

  Namibia             43452             53956              26377

  Somalia                               3158               

  Sudan                                 28272              

  Swaziland           17968             31689              11079

  Tanzania                              10967              9289

  Zambia                                127813             35

  Zimbabwe            209682            990795             105539

  TOTAL               709,944           1,781,641          331,646

  YELLOW CORN                                              

  Angola              537               204                

  Botswana            8205              20744              12535

  Indonesia                             49500              

  Japan                                 113098             

  Lesotho             6712              3843               5764

  Malawi                                359                

  Mozambique          5488              11459              880

  Namibia             13121             17261              14457

  Swaziland           28434             35111              38248

  Zambia                                189                

  Zimbabwe            653               10727              264

  TOTAL               63,150            355,779            72,148

  TOTAL CORN          773,094           2,137,420          403,794

  Per month           64,400            178,100            44,900

  IMPORTS Yellow                                           

  Argentina           221,364           360,542            729,219

  Per month           18,400            30,000             81,000
  ------------------- ----------------- ------------------ ---------------

Southern African Customs Union (Botswana, Lesotho, Namibia and
Swaziland) sales are the prime export market for the South African
industry averaging about 400,000 tons, 340,000 tons white and 60,000
tons yellow per season. Mozambique and Zimbabwe are the other high
potential markets.

The May/April 06/07 exports have been slow at an average of 45,000 tons
per month mainly due to a lack of overseas buyers and a slowdown in
sales to Zimbabwe. In MY 05/06 Zimbabwe bought 1.3 million tons at an
average of 112,000 tons per month but then the foreign exchange dried up
and sales to date in the new season averaged only about 11,700 tons per
month. Zimbabwe is still in need of imports but the financial situation
is critical.

Mexico has been putting out feelers for a reported 100,000 tons of white
corn with no specific GMO requirements, which could bolster exports.

  ------------------------ ----------------- ---------------- ------------
  **Import Trade Matrix**                                     

  **Country**              South Africa                       

  **Commodity**            Corn                               

  Time Period              May/April         Units:           MT

  Imports for:             2004/05                            2005/06

  U.S.                     0                 U.S.             0

  Others                                     Others           

  Argentina                221,364           Argentina        360542

  Total for Others         221364                             360542

  Others not Listed        0                                  0

  Grand Total              221364                             360542
  ------------------------ ----------------- ---------------- ------------

  ---------------------- ----------------- ------------------ ------------
  **Export Trade                                              
  Matrix**                                                    

  **Country**            South Africaf                        

  **Commodity**          Corn                                 

  Time Period            May/April         Units:             MT

  Exports for:           2004/05                              2005/06

  U.S.                   0                 U.S.               0

  Others                                   Others             

  Zimbabwe               210336            Zimbabwe           1001522

  Botswana               120888            Botswana           196452

  Mozambique             53884             Mozambique         150161

  Lesotho                118782            Lesotho            86694

  Namibia                56573             Namibia            71217

  Swaziland              46402             Swaziland          66800

  Angola                 34181             Angola             14366

  Kenya                  129451            Zambia             128002

  Japan                  0                 Japan              113098

  Indonesia              0                 Indonesia          49500

  Total for Others       770497                               1877812

  Others not Listed      2597                                 259608

  Grand Total            773094                               2137420
  ---------------------- ----------------- ------------------ ------------

# Biotech corn

Planting of genetically modified (GM) corn increased its market share
from 29 per cent of total South African corn planted in 2005 to 46 per
cent in 2006, according to a survey submitted to the Maize Trust. The
major unique trait remains insect resistance with 77 per cent of the
total GM corn, while herbicide tolerant corn now stands at 23 per cent.
In a related development, Monsanto's application for the approval of the
use of the stacked genes, using the two previously approved traits
mentioned above, gained official approval and will be available for
planting in 2007. The following table contains the details:

+-----------------+-----------------+-----------------+-----------------+
| Area planted    | White corn      | Yellow corn     | Total corn      |
|                 |                 |                 |                 |
| '000 ha.        |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| 2004 Total      | 1,700           | 1,110           | 2,810           |
+-----------------+-----------------+-----------------+-----------------+
| Biotech         | 147             | 263             | 410             |
+-----------------+-----------------+-----------------+-----------------+
| \%              | 8.65%           | 23.7%           | 14.6%           |
+-----------------+-----------------+-----------------+-----------------+
| 2005 Total      | 1,033           | 567             | 1,600           |
+-----------------+-----------------+-----------------+-----------------+
| Biotech         | 281             | 175             | 456             |
+-----------------+-----------------+-----------------+-----------------+
| \%              | 27.2%           | 30.9%           | 28.5%           |
+-----------------+-----------------+-----------------+-----------------+
| 2006 Total est. | 1,710           | 973             | 2,683           |
+-----------------+-----------------+-----------------+-----------------+
| Biotech         | 704             | 528             | 1,232           |
+-----------------+-----------------+-----------------+-----------------+
| \%              | 41.2%           | 54.3%           | 45.9%           |
+-----------------+-----------------+-----------------+-----------------+

White GM corn showed the most dramatic increase from 8.6 per cent of
total white corn area in 2004 to 41 percent in 2006. Yellow GM area
planted grew from 24 per cent to 46 per cent of total yellow area.

###### Rice

  --------------- ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- -----------
  **Country**     **South                                                                                   
                  Africa**                                                                                  

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

  1000 HA         2005       Revised                2006       Estimate               2007       Forecast   

  1000 MT         USDA\      Post\      Post\       USDA\      Post\      Post\       USDA\      Post\      Post\
                  Official   Estimate   Estimate\   Official   Estimate   Estimate\   Official   Estimate   Estimate\
                                        New                               New                               New

  **Market Year              01/2005    01/2005                01/2006    01/2006                01/2007    01/2007
  Begin**                                                                                                   

  Area Harvested  0          0          0           0          0          0           0          0          0

  Beginning       249        0          0           289        0          0           229        0          0
  Stocks                                                                                                    

  Milled          0          0          0           0          0          0           0          0          0
  Production                                                                                                

  Rough           0          0          0           0          0          0           0          0          0
  Production                                                                                                

  Milling Rate    0          0          0           0          0          0           0          0          0
  (.9999)                                                                                                   

  MY Imports      850        805        764         800        810        800         0          0          825

  TY Imports      800        805        764         800        810        800         0          0          825

  TY Imp. from    0          1          1           0          2          0           0          0          0
  U.S.                                                                                                      

  Total Supply    1099       805        764         1089       810        800         229        0          825

  MY Exports      10         27         26          10         25         25          0          0          25

  TY Exports      10         27         26          10         25         25          0          0          25

  Total           800        778        738         850        785        775         0          0          800
  Consumption                                                                                               

  Ending Stocks   289        0          0           229        0          0           0          0          0

  Total           1099       805        764         1089       810        800         0          0          800
  Distribution                                                                                              
  --------------- ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- -----------

South Africa does not produce rice, mainly due to the high water
requirements of the crop in a generally dry country. Imports are duty
free and consumption is based on the import data supplied by the WTA.
Exports are small and regional. Imports, and consumption, are increasing
as illustrated by the latest January to November data:

  ----------------- ----------------- ----------------- -----------------
  MT                Jan-Nov 2004      Jan-Nov 2005      Jan- Nov 2006

  Thailand          551,287           462,601           400,579

  India             98,344            243,346           353,299

  China             899               382               7,594

  Australia         2,372             2,452             3,990

  Pakistan          1,998             2,170             3,047

  U.S.              424               518               151

  Others            5,401             3,695             2,914

  TOTAL             660,725           715,164           771,574
  ----------------- ----------------- ----------------- -----------------

Thailand is still the dominant supplier but India is taking a growing
slice of the market while China is also beginning to show.

  ------------------------ ----------------- ---------------- ------------
  **Import Trade Matrix**                                     

  **Country**              South Africa                       

  **Commodity**            Rice, Milled                       

  Time Period              CY                Units:           MT

  Imports for:             2004                               **2005**

  U.S.                     462               U.S.             518

  Others                                     Others           

  Thailand                 616284            Thailand         481180

  India                    121549            India            268635

  Vietnam                  48                Vietnam          4025

  Australia                2625              Australia        2793

  Pakistan                 2192              Pakistan         2325

  Brazil                   170               Brazil           1298

  Uruguay                  1137              Uruguay          457

  Total for Others         744005                             760713

  Others not Listed        5542                               3188

  Grand Total              750009                             764419
  ------------------------ ----------------- ---------------- ------------

  ------------------------ ----------------- ----------------- ------------
  **Export Trade Matrix**                                      

  **Country**              South Africa                        

  **Commodity**            Rice, Milled                        

  Time Period              CY                Units:            MT

  Exports for:             2004                                **2005**

  U.S.                     0                 U.S.              0

  Others                                     Others            

  Zambia                   6077              Zambia            3582

  Congo DRC                3194              Congo DRC         5085

  Angola                   388               Angola            5257

  Zimbabwe                 2438              Zimbabwe          2289

  Malawi                   18                Malawi            8575

  Mozambique               479               Mozambique        668

  Total for Others         12594                               25456

  Others not Listed        1148                                791

  Grand Total              13742                               26247
  ------------------------ ----------------- ----------------- ------------