If there is one crop that South Africa has managed to lift its production in the recent past it is – soybeans. Its production has grown significantly since the dawn of democracy, from 67 700 tonnes in the 1993/94 production season to 1.6 million tonnes in 2017/18. This was stimulated by the growing demand for soybean oilcake, or meal, by the animal feed industry. This, in turn, has been driven by an increase in the demand for high protein food, particularly poultry products.
South Africa’s per capita consumption of poultry meat almost doubled over the past 17-years, currently estimated at 41 kilograms, according to data from the Department of Agriculture, Land Reform and Rural Development.
To service the growing demand, South African agribusinesses, supported by the government, made investments to increase domestic soybean processing capacity from roughly 860 000 tonnes in 2012 to a level in excess of 2.2 million tonnes. This was also aimed at stimulating domestic soybean production, as part of an import substitution strategy by the Department of Trade and Industry (dti). The farmers responded positively to these demand changes as evidenced by the aforementioned increase in soybean production.
But this has not led to full utilisation of the domestic soybean capacity. If we apply an estimate of 2.2 million tonnes of South Africa’s soybean crushing capacity, which equates to 183 333 tonnes per month, then the country utilised, on average, 52% of its monthly soybean processing capacity over the past six months, as illustrated in Figure 1 below, which is a Chart of the Day.
With the soybean harvest in the 2018/19 season estimated at 1.2 million because of unfavourable weather earlier in the season, we can expect South Africa’s soybean crushing plants’ utilisation rate to remain at levels we are witnessing, or even lower in the coming months.
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