Miller Magazine Issue: 139 July 2021

100 Country Profile MILLER / july 2021 a meal, is the highest at 96kg/person, followed by wheat (55kg/person) and then rice (15kg/person). Consumers can substitute rice, wheat, and corn prod- ucts based on price and taste preferences. However, the demand for corn and wheat products is relatively price inelastic, diminishing major shifts in consump- tion due to price movements. South Africa’s wheat area has stagnated at around 500,000 hectares per annum with an average yield of 3.3 tons per hectare. However, USDA foresees a 10 percent increase in the area planted with wheat to 560,000 hectares in 2021/22 season. “Under nor- mal climatic conditions and an assumed 5-year av- erage yield of 3.5 tons per hectare, a wheat area of 560,000 hectares could realize a crop of about 2.0 million tons, seven percent less than the previous marketing year”. South Africa’s annual wheat consumption in- creased on average by about one percent per an- num over the past ten years. Due to slow econom- ic growth and a second consecutive bumper corn crop, major increases in the consumption of wheat products are not foreseen in 2020/21 season. Wheat demand in the 2020/21 season is expected to be around 3.5 million tons. Due to a stay-home policy to reduce the spread of COVID-19, many people shift to home baking, increasing the demand for cake and bread flour. According to the South African Grain Information Service (SAGIS), the usage of cake flour and bread flour increased by seven percent and four percent, respectively, in 2019/20 marketing year. However, USDA believes wheat demand should return to the trend line in the 2020/21MY as more people resume normal economic activities. USDA forecasts South Africa’s imports of wheat and wheaten products for 2021/22 MY at 1.7 million tons, five percent more than in 2020/21 season, mainly due to an estimated seven percent drop in local production. DEPENDENT ON RICE IMPORTS 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 imports are duty-free and local consumption is derived from publicly available import data. Over the past 10 years, South Africa’s demand for rice has increased marginally. Poor econom- ic growth and an increased in the demand of relatively cheaper cornmeal, hindered a sub- stantial increase in the demand for rice. With economic growth in South Africa expected to continue to be sluggish, due to the COVID-19 pandemic and structural and policy constraints, USDA foresees that the marginal increase in the demand for rice will continue in 2020/21 and 2021/22 to 900,000 tons and 925,000 tons, re- spectively. In 2019/20 season South Africa con- sumed 875,000 tons of rice. South Africa’s rice imports are dominated by two countries, namely Thailand and India. Together, Thai- land and India supplied around 95 percent of South Africa’s rice demand, with Thailand’s contribution around 75 percent. In 2021/22 marketing year, South Africa’s rice imports are expected to increase by only one percent to 1.06 million tons on a marginal increase in demand. FOOD PROCESSING INDUSTRY There are over 1,000 food production companies in South Africa. The top ten companies are respon- sible for more than 80 percent of the industry’s production revenue. The industry employs approxi- mately 400,000 people, a decrease from the previ- ous year due to the pandemic, in the subsectors of meat, fish, fruit, dairy products, grain mill products, and beverages. As a major producer and exporter of finished processed food products in Africa, South Africa’s appetite for ingredients drives demand for a wide range of products. Corn Productıon, Consumptıon and Exports ın South Afrıca (1000 Tons) 2019/2020 2020/2021 2021/2022 Production 16000 16500 15000 Consumption 12600 12800 13250 Exports 2500 3000 1500 Source: USDA Rıce Productıon, Consumptıon and Imports ın South Afrıca (1000 Tons) 2019/2020 2020/2021 2021/2022 Production 0 0 0 Consumption 875 900 920 Imports 960 1050 1060 Source: USDA Wheat Productıon, Consumptıon and Imports ın South Afrıca (1000 Tons) 2019/2020 2020/2021 2021/2022 Production 1535 2100 1960 Consumption 3605 3680 3550 Imports 2029 1800 1700 Source: USDA