South Africa is poised for its strongest corn exports in 20 years,
boosted by a bumper harvest and the competitiveness afforded by a sliding
currency in a market already notable for its ample supplies.
South Africa will in the year starting in May ship 3.50m
tonnes of corn, the US Department of Agriculture bureau in Pretoria said, a jump
of 70% year on year.
The figure, 1.2m tonnes above the USDA's official estimate, will
lift the country to sixth among world exporters, and reflects in part the best harvest
in 33 years.
The bureau estimated output at 14.6m tonnes, a rise of 16.9%
year on year, comprising 13.9m tonnes of production from commercial farmers,
and a harvest from subsistence growers of 700,000 tonnes.
Crops were supported by unusually strong rains, beginning in
On Wednesday, South Africa's official Crop Estimates
Committee pegged the commercial harvest, which is in its final stages, at
13.94m tonnes, an upgrade of 50,000 tonnes on its previous estimate.
However, the bureau also highlighted the boost to South
Africa's export hopes from a drop in the rand, down 20% against the dollar from
the start of 2013, undermined by labour unrest in its important mining sector.
South Africa is enjoying "increased corn price
competitiveness in the world market, due to a weakening rand-dollar exchange
Furthermore, the country, has seen a particular decrease in
domestic prices, down 50% in the past six months, compare with a drop of some
16% in Chicago futures.
The decline reflects the return of South Africa to ample
local supplies after a period early in 2014 when the extent of exports of last
year's crop depleted domestic inventories, sending prices to levels which
South Africa imports some 80,000 tonnes of Ukrainian corn to
underpin its supplies until the latest harvest.
Prices for the rest of 2015 look like staying "close to
export parity", the bureau said, implying further weakness with prices for
shipping, facing strong world competition, at a little over half those for
import, which include an allowance for transport costs.
Outlook for 2015
The bureau forecast a retreat in South Africa's corn
production next year, to 13.0m tonnes, reflecting a return to average yields,
albeit with sowings expected to remain at 3.2m hectares.
The estimate comprises 12.3m tonnes of commercial
production, and 700,000 tonnes grown by subsistence farmers.
That harvest will support corn exports of 2.5m tonnes in the
year beginning in May 2015, the bureau said.
South Africa's domestic needs are being swollen by increased
population and economic growth, with demand for corn for feed rising by 2% a
year, and for feed by 3%.
Its major export markets last season were Japan, at 596,000
tonnes, Zimbabwe at 287,000 tonnes and Botswana at 210,000 tonnes.