The South African Cereals and Oilseeds Trade Association (Sacota) warned that load shedding was an additional cost to the sector, which would stifle production.
Sacota is an association of trading members operating within the grain and agricultural sector within South Africa, and the Southern African Development Community.
The organisation’s executive director, Dr André van der Vyver, commenting on the current power load shedding woes in South Africa, said grain and oilseeds were bulk commodities and to handle them required considerable Eskom power at the storage and handling facilities, which could not effectively be substituted by generators.
“Generators and solar power systems currently only act as emergency sources. Then you also have the same challenges at offloading, whether it is in the harbour or at the local mills,” he said.
Van der Vyver said South Africa’s food security was being threatened not because of the availability, but due to the challenges to reach the consumer.
“And if it does, additional costs are added. The more costs we add, the less competitive we are, and it will stifle production,” he warned.
Meanwhile, Sacota expects good maize and soybean crops this year.
Van der Vyver said this year the current crop had an excellent start, assuming the next two to three months the South African summer grain production areas received normal rainfall.
“Global market prices are still relatively high, mostly because of the Ukrainian invasion,” he said.
Both maize and soybean production were on an uptrend as production currently increased at a faster rate than consumption, translating into surpluses getting bigger.
Data released by the Crop Estimates Committee last week broadly put the 2022/23 total area plantings for summer crops at 4.31 million hectares of summer grains and oilseeds in the 2022/23 season. This was down by 0.7% from the previous season, and 0.9% from the intentions to plant, according to data released earlier in the season.
The 2022/23 maize planting intention was 2.54 million hectares, down 3% year-on-year (y/y). About 1.47 million hectares was white maize (down 6% y/y), and 1.07 million hectares was yellow maize (up 2% y/y).
Van der Vyver said as long as South Africa could export competitively, there was huge potential.
One single export vessel of maize generated R260 million in foreign exchange.
During 2021/22, South Africa produced a surplus of maize and soybeans.
“More important, however, is that it can be competitively exported to the global market. Most of the surpluses were exported during 2022. We think of years in terms of seasons, and it appears as though our members will achieve about 3.13 million tons of deep-sea exports for the 2022/23 season ending April, 2023. This will comprise 2.85 million tons of maize and 330 000 tons of soybeans,” Van der Vyver said.
Two major highlights of the previous season on the export market was the re-opening of East London harbour for maize exports. The harbour, which was closed for about a decade, saw the first yellow maize vessel sailing in June, last year. Another highlight had been the opening-up of soybean markets for exporting of soybean surpluses, as four new markets were opened up by ETG (Export Trading Group), one of Sacota’s multinational trading members.
He said, “On the low side, the unfortunate flooding of parts of KwaZulu-Natal, including the harbour had disastrous consequences. It affected exports, but also added costs to the system.
“Bulk grain commodities are heavily dependent on rail movement. Despite an excellent recovery effort by Transnet, the railway line to Durban was closed for months and then only opened at half of its capacity or even less. Fortunately, the logistical challenges associated with the floods have now largely been overcome,” he said.
But Van der Vyver said cable theft needed to be effectively addressed.
“An effective and competitive logistical export value chain is critical to the industry. More work needs to be done in respect of closer co-operation with institutions such as Transnet Freight Rail,” he said.
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