SOUTH AFRICA – South Africa could be the main beneficiary on the African continent if Asia’s largest economy diversifies its corn source markets from the US to South Africa and Latin American countries.
The estimate was revealed by the United States Department of Agriculture (USDA) in its June world grain market forecast.
In such a context, South Africa has an opportunity to position itself by taking advantage of two major advantages.
On the one hand, the country has an exportable surplus of 3.7 million tonnes during the 2022/2023 campaign, and on the other hand, the weakness of its currency improves its export competitiveness compared to its competitors.
The South African rand has also lost 15% of its value since the start of this year, a boon to boost the country’s international sales and generate foreign exchange for an economy that narrowly escaped recession in the first quarter.
Additionally, the USDA highlights that the shipment of 53,000 tonnes of feed corn on 4 May marked the beginning of regular shipments of South African corn to China.
So far, South Africa has already shipped more than 100,000 tonnes of maize to the Middle Kingdom this year.
While this volume remains low compared to China’s overall imported stock of over 20 million tonnes since 2021, the USDA estimates that exports should improve further by the end of the campaign next September.
The move by China, however, spells doom to most of the African nations that rely on imports from South Africa.
South Africa is the largest producer of both yellow and white maize on the continent with regional countries depending on it to bridge their deficits for human consumption and animal feed.
Experts provide that the high demand for maize by China will pile more pressure on the price of the product in the African market, which is already high curtailing millers’ and traders’ ability to import the grain.
For South Africa, however, increased sales in China, the world’s largest maize importer, would further strengthen its base in Asia. The country has already exported its maize to the other 4 main cereal importers in the region, namely Japan, Vietnam, Taiwan, and South Korea.