Written for and first appeared in The Mail & Guardian
If one is not dealing with a particular commodity in their daily business, rarely do they keep an eye on whether it is produced sufficiently locally or imported. The main concern for consumers is always whether they get their preferred products on shelves when they go to the store. This has been the reality of wheaten products in South Africa.
Hence, some South Africans realising that the country imports roughly half of its annual wheat consumption has sparked a discussion about why the country is not expanding domestic production in all the fallow land in some provinces. This is a fair question about the threat of rising wheat prices and constraints to supplies amid the Russian invasion of Ukraine; both countries account for nearly a third of the world’s wheat exports and have increased food security concerns.
South Africa began importing over a million tonnes of wheat from the 2003/04 marketing year. In the years before that, wheat imports averaged 458 518 tonnes, for example, between 2002/03 and 1989/90. The surge in imports resulted from an increase in consumption and a decline in area plantings.
From the 1997/98 season, South Africa’s wheat plantings fell below a million hectares, which was the norm in seasons before this period. This decline is better explained by the profitability challenges that farmers have faced since that period, specifically in the Free State, and non-conducive climatic conditions. The critical thing to recall is that before 1997/98, South Africa’s agricultural markets were regulated, and the various commodities boards played a massive role in setting prices, including wheat. Thus, after the deregulation period, the South African farmers had to compete in the global market. And thus, production areas of the Free State came under profitability strain, resulting in farmers switching from wheat to other profitable crops.
Other provinces of South Africa don’t have large areas with conducive climatic conditions for high-quality wheat milling for human consumption. Hence, we speak of a few major wheat-producing provinces, being the Western Cape and mainly under irrigation in the Northern Cape, Free State, Limpopo and North West.
A significant development over the years is improving productivity in South Africa’s wheat farming. In 1997/98 and years before that, South Africa’s wheat yields were below 2,0 tonnes per hectare. Currently, the yields are 4,3 tonnes per hectare as of the 2021/22 production season.
As a result of improved profitability, South African wheat production has remained relatively large, and the 2021/22 crop was the largest in 20 years, about 2,3 million tonnes. This harvest materialised as a result of both South African farmers’ better farming practices and favourable weather conditions, which boosted yields. This also helped reduce the volume of imports South Africa required in the 2021/22 marketing year to 1,48 million tonnes, from 1,52 million tonnes in the 2020/21 marketing year.
The current import volumes are roughly half of South Africa’s annual wheat needs. Fortunately for the near term, the country’s millers and food processors have now brought 704 050 tonnes of this volume into our shores as of the week of 11 March 2022. The 2021/22 marketing year will end in September.
There are also questions about whether the South African farmers will increase wheat plantings in areas where the crop can grow. Wheat is a winter crop, and South Africa’s winter crop season starts at the end of April 2022. This is also when we will have data about the farmers’ intentions to plant wheat, which will outline the planned area. The data will be publicly available from 26 April and released by the Crop Estimates Committee.
Still, this past Friday, I participated in an uplifting meeting with grain farmers’ representatives, assessing the farmer sentiments ahead of the 2022/23 wheat (and other winter crops) season. Like all farmers, they are concerned about the rising fertiliser, fuel and agrochemicals costs.
Still, there was optimism that the South African farmers would get on with business and till the land when the season starts; hopefully, the weather conditions will bless the country again with good rains in the winter crop growing areas. I am positive that we could also see an increase in plantings in the Free State and Northern Cape, as the recent heavy rains have boosted soil moisture in these areas.
As for the domestic wheat supplies, over the foreseeable future, South Africa shouldn’t have shortages amid the Russia-Ukraine war and the disruptions it has caused in the global grains market. There is, however, a risk of potential of an uptick in wheaten products prices. This will also be a function of rising fuel costs.
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