South Africa - International Franchise Association

Foreign Agricultural Service U.S. Embassy Pretoria, South Africa Tel: +27 (0)12 431
4057; Fax: +27 (0)12 342 2264 Email: agpretoria@fas.usda.gov
Overview Grains Return to top
The grain industry (barley, maize, oats, sorghum and wheat) is one of the largest
industries within the South African agricultural sector, producing between 25 percent and
33 percent of the total gross value of agricultural production. The industry is comprised
of a number of key stakeholders including input suppliers, farmers, silo owners, traders,
millers, bakers, research organizations, financiers, etc. The animal feed industry is an
important client and role player in the grain supply chain. Around 4 million tons of grain
and 1.5 million tons of oil cake (from imported and locally produced sunflower and soy
beans) are used by the animal feed manufacturing industry in South Africa.
Corn is the largest locally produced field crop, and the most important source of
carbohydrates in the SADC region for animal and human consumption. South Africa is
the main corn producer in the SADC region, with an average production of around 12
million tons per annum. Local commercial consumption of corn amounts to about 9
million tons, and surplus maize is usually exported. Wheat is produced mainly in the
winter-rainfall areas of the Western Cape and the eastern parts of the Free State with
considerable annual fluctuations in production. Average wheat production has been
about 2 million tons a year. There is, however, a distinct downward trend in the area
planted with wheat over the past few years. With the current decline in wheat prices for
the 2010/2011 marketing year, producers are expected to scale down wheat production.
Extra wheat must be imported to meet local requirements of about 3.3 million tons.
South African Grain Market
FY 2009 FY 2010 FY 2011
Total Local Production 13 million tons 15 million tons 13 million tons
Total Exports $520 million $250 million $700 million
Total Imports $700 million $700 million $985 million
Imports from the U.S. $10 million $80 million $127 million
Best Product: Wheat
South Africa is the only country in the region with significant wheat production. However,
in the past 20 years, and especially after the deregulation of the market in 1997, there
has been a decreasing trend in the area planted with wheat despite an increasing trend
in the local consumption of wheat. Declining profit margins saw local wheat farmers
scaling down wheat production and switching wheat fields to other crops like canola,
oats, corn, soya beans or increased livestock production. Furthermore, the trend in
wheat production has been sporadic over the past 20 years because of unpredictable
weather conditions. Unless there is an advance in technology or policy changes, the
decreasing trend in hectares planted with wheat in South Africa will continue in the
future.
South Africa’s 2011/12 MY (October 2011 to September 2012) wheat crop is estimated
at 1.9 million tons on 605,000 hectares. However, 1.9 million tons of wheat is still almost
1.4 million tons less than the expected local demand. Annual wheat consumption in