SA to remain nett exporter of oilseeds

The relative profitability of world oilseed production is set to increase, mainly driven by improvements in yields and technology, and a solid price supported by consistent growth in demand.

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That’s according to the Bureau for Food and Agricultural Policy’s Baseline 2010 report by the University of Pretoria under the leadership of Dr Ferdinand Meyer.

The report stated South Africa will remain a nett exporter of oilseeds, while rising demand for oilcake and vegetable oils would be met by a rise in imports, mainly from South America.

Local area planted under sunflowers is projected to rise by 58% to 626 600ha in 2011, due to the higher profitability of sunflower seed production compared to maize production, after which it was expected to decline in 2012 and then settle at around 520 000ha towards the end of 2019.

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The sunflower seed price should trade relatively close to import parity levels in 2010 at an annual average price of R3 
487/t, but is likely to decline in 2011, due to the higher projected plantings.

During the rest of the baseline period, local sunflower seed prices should increase in line with higher international prices and the expected fall of the exchange rate.

Domestic use of sunflower seed is likely to decline from 840 000t in 2009 to 680 000t in 2010, due to lower local supply and higher prices. Between 2011 and 2019, total domestic use is predicted to be between 710 000t and 720 000t.
Domestic production is set to increase from around 700 000t in 2011 to just under 800 000t in 2019. “As supply should exceed domestic use, South Africa is projected to be a nett exporter of sunflower seed over the baseline period,” said the report.

South Africa should remain a competitive exporter of soya into premium export markets – 168 000t of the local soya crop will be exported by 2019.

Soya plantings will rise due to the poorer profitability of maize production, and lower soya input costs, which could ease the pressure on cash flow for farmers.

“Soya prices should rise over the baseline, mainly due to higher international prices and the projected fall of the exchange rate, causing parity prices to increase,” stated the report.

From 2011 to 2019, soya plantings should rise by 6,1% per year to reach a total of more than 500 000ha, yielding 1,1 million tons at the end of the baseline period.

No major changes in canola supply and demand are projected over the baseline period, with total local production expected to increase slowly from around 40 000t in 2011 to 50 000t in 2019. The local canola price should follow international prices, increasing from under R3 000/t in 2010 to about R5 500/t in 2019.

South Africa will remain a major importer of soya oilcake, mostly from South America, and imports of close to 1 million tons will be required by 2019 to supplement the shortfall in local production. Due to a projected decline in Argentine prices, the local soya oilcake price should continue its downward trend until 2011 before rising again, due to the expected fall of the exchange rate.

The local sunflower oilcake price will stay at 2009 levels (R2 130/t) until the end of 2012. Then it will start to increase again to reach R2 880/t in 2019.

Domestic use of sunflower oilcake should fall slightly to 380 000t in 2012 before picking up again to 440 000t at the end of the baseline period.

Strong growth in vegetable oil demand should drive a rise in world vegetable oil prices between 2010 and 2019. South Africa should remain reliant on vegetable imports, mostly coming from South America, as local production falls short.