Johannesburg - The Bureau for Food and Agricultural Policy has projected that South Africa’s annual wheat imports would reach 24.4 million tons by the year 2025 as water scarcity and farmers scaling back on production could push demand up in the future.
Paul Makube, a senior agricultural economist at FNB, said some of the reasons could be attributed to the struggling market.
“Wheat production is mostly limited to the Western Cape and Free State provinces and those provinces are also looking at replacing it gradually with by profitable crops.
“So it is not surprising that in the future we will be importing more wheat in 2025,” Makube said.
He argued that as South Africa was expected to scale back on wheat production because of water scarcity among other things, the world wheat production would increase.
“South Africa will continue to be a net importer of wheat in the future,” said Makube.
Makube said the world’s wheat production stood at 743 million tons and it would continue to rise.
Water availability
He said water availability would determine how much wheat the country would have to import in the future.
“The situation can still change in the next few years if water becomes available. Right now we are very much a water scarce country,” he said.
This year South Africa imported 1.78 million tons of wheat, with 40 percent coming from Russia. Germany, Poland and the US are the other big wheat exporters to South Africa, according to Makube.
Wandile Sihlobo, an agricultural economist at the Agricultural Business Chamber, said in the week ending August 5, wheat imports came in at 11 405 tons, down 76 percent from the previous week’s volume of 48 369 tons. This brought the country’s 2015/16 wheat imports to 1.74 million tons, or 88 percent of the seasonal import estimate of 2 million tons.
“The sources of wheat imports have been diverse - 41 percent from Russia, 13 percent from Germany, 11 percent from Poland and 10 percent from the US among others.
Meanwhile, despite being a net importer of wheat, South Africa is exporting wheat into regional markets.
The exports for the week ending August 5, 2016, were reported at 208 tons. All went to Lesotho, said Sihlobo.
He said wheat prices fell 21 percent from a peak of R5 171 a ton on May 27 to R4 078 by July 29.
“The pull-back of domestic grain prices was not only driven by the firming rand, but also by global commodity prices, under the weight of good crop conditions across the US Midwest, which provided some downward pressure on South African prices,” said Sihlobo.
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