April marked the end of South Africa’s 2023/24 marketing year for maize. This marketing year corresponds with the 2022/23 production season, as the crop harvested mid-year in 2023 was marketed from then through to the end of April 2024.
According to data from the Crop Estimates Committee (CEC), the 2022/23 production season was characterized by an excellent harvest of 16,4 million tonnes. This was on the back of large plantings and the favourable summer rainfall that boosted the yields.
The ample harvest allowed South Africa to maintain its position in export markets. South Africa is the world’s ninth largest maize exporter, trailing the US, Brazil, Argentina, Ukraine, Romania, France, Paraguay and Poland. Data from the South African Grains Information Services shows that in the 2023/24 marketing year, the exports amounted to 3,4 million tonnes, down by 6% from the previous year. About 63% of the exported maize was yellow, with 37% being white maize.
In the past, South Korea, Japan and Taiwan were the leading markets for South Africa’s maize exporters. But in the 2023/24 marketing year, Zimbabwe took the lion’s share of the exports, accounting for 18% of the 3,4 million tonnes of exports.
The surge in exports to Zimbabwe comes after a few years of modest exports to the country because of decent domestic harvest and the restrictions on genetically modified maize, which the government often used as a barrier to imports in certain seasons. However, the regulations have changed, and Zimbabwe now imports genetically modified maize.
Other large maize export markets in the African continent are Botswana and Mozambique, which accounted for 9% and 6% of South Africa’s total maize exports, respectively. South Korea, Japan and Taiwan remained significant export markets for South African maize, accounting for 14%, 13% and 13% shares in the total exports, respectively. Another important maize export market for South Africa in the Asian region is Vietnam. Still, its exports were slightly lower than other countries, accounting for a 5% share in the overall export markets.
While the export season was a success, the coastal regions of South Africa started worrying about the maize supplies at the end of the 2023/24 marketing year, specifically pricing when considering the transport costs from central regions of the country that are main maize producers. Disappointingly, the excellent 2022/23 maize production season is followed by a less promising season.
In the 2023/24 production season (which corresponds with the 2024/25 marketing year), South Africa’s maize harvest is forecast to fall by 19% year-on-year to 13,3 million tonnes. This is according to data from the CEC. This decline in harvest is primarily due to unfavourable weather conditions in February and March, where dryness and heatwave caused widespread crop damage in various regions of South Africa.
Subsequently, the coastal areas in South Africa worry about tight supplies in the new marketing year. This led to 32 691 tonnes of yellow maize imports from Argentina in the last week of the 2023/24 marketing year. We suspect there will be additional imports in the 2024/25 marketing year, primarily for the country’s coastal regions. These imports will help increase supplies for the animal feed industry.
Notably, while South Africa expects a significantly lower harvest this year, the country could remain a net exporter of maize. With an annual maize consumption of approximately 12,0 million tonnes and a harvest of 13,3 million tonnes, South Africa will have over a million tonnes of maize for exports.
We also believe there are decent carryover stocks from the past season, which will help increase the maize supplies for the new marketing year of 2024/25. Still, there remains heightened uncertainty about the actual size of the maize crop this year. The forecast of 13,3 million tonnes is the third estimate by the CEC. In the coming months, the Committee could still adjust the figures depending on their observations of the yields in the various regions of South Africa.
Moreover, it remains unclear what the impact of the rains in early April, after two months of damaging dryness, mean for the crop size. Many observers, ourselves included, were surprised when the CEC mildly lifted their crop forecast on April 25. The market expectation was a possible downward revision of the crop.
Another challenge that lingers as we start the 2024/25 marketing year is Southern Africa’s maize demand. The major maize producers and consumers in the region, such as Zambia, Zimbabwe, and Malawi, all saw notable crop failures because of dryness at the start of this year. While the limited harvest from the fields could cover the next few months of domestic consumption in each country, these countries’ import needs could intensify at the end of the year and into 2025.
Aside from South Africa, the hope for these countries is that Mexico could export to the region. Still, this will depend on whether Mexico planted sufficient maize. Unlike in the past, South Africa will likely be unable to satisfy the needs of the regional maize. More information about the regional maize needs will be clearer in the coming months. The important thing for South African farmers and traders to do right now is to monitor regional maize developments closely.
In sum, May is the start of the 2024/25 marketing year for South African maize. Unlike the previous years of high export volumes, this new marketing year will likely see significantly lower export volumes. Still, the regional maize need should remain on the radar of the South African grain traders. Significantly, with all these maize trade difficulties, the South African government will thankfully not intervene in the maize markets.
The Department of Agriculture, Land Reform and Rural Development provided this assurance to market participants last month. The tight supply could cause price volatility in the coming months but this should not be a cause for deviations in the current agricultural policy.
What the government has urged, which is already a practice in South Africa, is a timely reporting of the export and import activities. Such data is critical for effective market functioning so that the participants know when the supplies are tight, and price adjustments could help moderate the export activities.
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