SA to remain a net importer of soybeans in 2018/19

• Our recent interactions with farmers in some soybean growing areas support the National Crop Estimates Committee’s (CEC) view of a possible record crop of 1.39 million tonnes in the 2017/18 production season. The yields expectations vary across the country, mainly ranging from average and above average yields.
• The CEC’s yield estimate is 1.77 tonnes per hectares, which is 23 percent lower than the previous season. With that said, this is slightly higher than the average yield of the past five production season (1.75 tonnes per hectare). Above all, the expected large harvest is boosted by both an increase in area planted, as well as expected higher yields (see Chart below).
• Although this is a notable improvement, from levels of just a half a million tonnes in the 2009/10 production season, it will not satisfy South Africa’s consumption levels. The country will remain a net importer of soybeans, estimated at 20 000 tonnes. This, of course, is an improvement from higher levels of 27 508 tonnes in 2017/18 and 271 098 tonnes in 2016/17 marketing year.
• All soybeans imported in the 2017/18 marketing year originated from the African countries, namely Zambia, Zimbabwe, Malawi, and Ethiopia. Underpinning this is a solid demand from the soybean crushing plants, which in turn is driven by growing demand from the animal feed industry.
• Almost all the aforementioned countries had a bad start to the 2017/18 production season, characterized by warm and drier weather conditions, as well as fall armyworm infestations in the case of Zambia. Therefore, it is unclear if they will still dominate the South African soybean market this year. We could perhaps see a return of South American countries such as Paraguay or Brazil, which are currently expecting a fairly large harvest. More will unfold over the coming months.

Chart: South Africa’s soybean production

Source: SAGIS, Agbiz Research  

Full report by Wandile Sihlobo available in the attachment below:

Agbiz Morning Market Viewpoint on Agri-Commodities 12 April 2018