Categories Business Tech World SA mainly exposed to wheat imports, not maize | Post author By vanirexodus Post date March 9, 2022 No Comments on SA mainly exposed to wheat imports, not maize | The effects of the war in Ukraine will mainly expose South Africa to wheat imports, but not to corn, which we have plenty of. Together, Russia and Ukraine export about 29% of the world’s wheat, 14% of the world’s corn and 60% of the world’s sunflower oil. This will immediately ring alarm bells for consumers who are concerned about where food will come from in the future and how much it will cost. Are we producing enough corn and wheat for our own consumption? Should we have exported so much corn last year without keeping enough for ourselves? According to Christiaan Vercueil, intern… The effects of the war in Ukraine will mainly expose South Africa to wheat imports, but not to corn, which we have plenty of. Together, Russia and Ukraine export about 29% of the world’s wheat, 14% of the world’s corn and 60% of the world’s sunflower oil. This will immediately ring alarm bells for consumers who are concerned about where food will come from in the future and how much it will cost. Are we producing enough corn and wheat for our own consumption? Should we have exported so much corn last year without keeping enough for ourselves? According to Christiaan Vercueil, a trainee agricultural economist at Grain SA, Ukraine is the fourth largest producer of maize in the world, producing 42 million tons per year, with an expected export of 33.5 million tons, accounting for 17% of the global export supply. Russia is the sixth largest producer of maize, with a production of 15 million tons, with an expected export of 4.5 million tons. When it comes to wheat, Ukraine is the third largest exporter with a production of 33 million tons and an expected export of 24 million tons, accounting for 12% of the global export supply. Russia is the largest producer in the world, with 75.5 million tons and an expected export of 35 million tons, which is 17% of the global export supply. Ukraine is the largest producer of sunflower oil in the world, with a production of 17.5 million tons, or 30% of global production, 61% of world exports of sunflower meal and 50% of sunflower oil. Russia is the second largest producer of sunflowers, producing 15.8 million tons, or 27% of global production, 20% of global sunflower meal exports and 28% of sunflower oil exports. ALSO READ: Invasion in Ukraine: consequences for SA No export from Russia and Ukraine Vercueil says that because of the sanctions against Russia, exports will be suspended indefinitely until the conflict is resolved. “Ukrainian exports have come to a complete standstill because ports are being attacked. Even if ports were functioning normally, there would be no means for producers to move products from farms to these ports for export.” He says maize will be least affected, as the Russian planting season is not planned for the coming months and most of Ukraine’s exportable maize has already been exported. ALSO READ: Food inflation: the culprit is mainly global developments – economist ZA maize production South Africa produced 16,315,000 tons of maize during the 2021/22 marketing year, of which 8.6 million tons of white maize and 7.7 million tons of yellow maize. “Our current exports to date are estimated at 568,569 tons for white maize and 2,473,253 tons for yellow maize, while the local consumption is estimated at around 11 million tons. These figures indicate that South Africa will have until May, when the new harvest begins, still has enough supply to meet local demand.” ALSO READ: Wheat production forecast: there is hope for food prices SA wheat production On the other hand, South Africa is a net wheat importer because we don’t produce enough wheat to meet local demand, Vercueil says. South Africa imports more or less half of our wheat demand, depending on our local crop. South Africa uses 3.4 million tons of wheat per year. “If the conflict continues to hamper wheat exports from Russia and Ukraine, we can source wheat from other countries. For the current season we have mainly imported from countries like Lithuania, Argentina, Australia and Latvia, but the previous season we imported no less than 210,000 tons of wheat from Russia.” But while South Africa can source wheat from several countries, Vercueil says, the situation in Russia and Ukraine is impacting world prices because they are such major players in the international wheat trade. “That is why import prices to South Africa are also affected, regardless of the origin of the import. The downside is that this wheat will be very expensive, as wheat prices will have increased by almost 68% in 2022 and reached record highs, surpassing the high prices of the 2008 financial crisis.” ALSO READ: Fuel and food prices fueled a steady rise in inflation in 2021 How will the fallout in Ukraine affect prices? He says corn prices will be less subject to change so far, but wheat prices are in an unprecedented rally of nearly 68% for 2022 and it is very difficult to predict how far this rally will continue as there are many variables be in play. Vercueil points out that the market prices of grain and oilseeds are not the only products at record levels. Energy and input prices, such as oil, fertilizers and agrochemicals, are also currently high. ALSO READ: Why 2021 was a (rare) top year for SA agriculture Import of sunflower oil dr. André van der Vyver, director of the South African Cereals and Oilseeds Trade Association (Sacota), says South Africa almost never imports raw sunflower seeds or soybeans, although we do import the processed product. South Africa only imports sunflower seed cake in small quantities (about 12,000 tons in 2020/21), but last year we ran out of local product. The new crop should be harvested in April/May 2022. Sunflower oil is imported in larger quantities (about 220,000 tons in 2020/21). “All these prices have increased by 33% to 50% in the last two months. The prices for sunflower seeds in particular have risen sharply locally and worldwide, because Ukraine is such a large producer of sunflower seed.” Van der Vyver says we can expect a local price increase, but not to the same extent as the raw materials. “The cost contribution of the raw material to the selling price is relatively small, but varies from product to product.” ALSO READ: Highest petrol price ever means looming increases in food prices, inflation Additional worries Stellenbosch University’s Office of Economic Research says there are additional concerns about the cost of fertilizers, as Russia and Belarus are major players in this market. Belarus is one of the world’s largest producers of potash, an important fertilizer ingredient. Like Russia, Belarus has been hit by severe sanctions for supporting Russia’s war effort. The sharp rise in grain prices, with fertilizers to follow, poses significant upside risks to already record high global food prices.” ← Gunmen in northwestern Nigeria kill 19 security personnel → Western Cape diverges from SA stance on Russia in support of Ukraine Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment * Name * Email * Website Save my name, email, and website in this browser for the next time I comment.