Miller Magazine Issue: 117 September 2019

SOUTH AFRICA 86 MILLER / SEPTEMBER 2019 Annual wheat consumption in South Africa is about 3.3 million tons, or about 55 kg per capita, which means South Africa will have to import at least 1.8 million tons of wheat to meet local demand. South Africa’s wheat consumption is the highest in sub-Sa- haran Africa and is expected to increase annually with population growth and increased urbanization to South Africa’s major cities. USDA forecasts South Africa’s imports of wheat and wheat products for the 2019/20 MY at 1.9 mil- lion tons, 12 percent more than in the 2018/19 MY, mainly due to an estimated eight percent decrease in local production. For the first five months of the 2018/19 MY, South Africa imported 403,268 tons of wheat with Germany, Russia, and Latvia the major importers. South Africa aims to have 85% of its wheat require- ments grown locally. “We are working towards this, making certain changes to grading regulations and looking at the yield versus quality and the trade off to encourage more South African farmers to grow more wheat,” says Geoff Penny, South African Chamber of Baking Executive Director . RICE IMPORTS EXPECTED TO INCREASE South Africa is dependent on rice imports to meet the local demand as rice production is insignificant in the country due to the high water requirements of the crop. As a result, rice im- ports are duty free. Thailand and India, together, supply more than 90 percent of South Africa’s rice demand, with Thailand’s contri- bution almost 80 percent. USDA forecasts a marginal four percent increase in the rice consumption in the 2019/20 MY to 980,000 tons, on the back of higher corn and wheat prices. In the 2019/20 MY, South Africa’s rice imports are expected to increase by two percent to 1.1 million tons. Consumers can substitute rice, wheat and corn products based on price and taste preferences. However, there is vast differences in the annual per capita consumption of these commodities in the country. For example, each South African consumes an annual average of around 100 kg of corn (mainly white corn), 58kg of wheat and only 16kg of rice. The demand for corn and wheat products is also relatively price inelastic, diminishing major shifts in consump- tion due to price movements. FOOD PROCESSING INDUSTRY There are over 1,800 food production companies in South Africa. However, the top ten companies are responsible for more than 80 percent of the industry’s production revenue. The industry employs 450,000