South Africa’s soya bean sector has been identified as a strong contender to meet growing international demand. According to Grain SA manager Dr Dirk Strydom, a bumper bean crop of 1.55 tons has been recorded locally, leaving the country with surplus stock after meeting home processing demand of 1.2m tons.
“Moreover, expectations are that if weather is favourable this will also be the case next year.” Also working in South Africa’s favour is the country’s apparent ability to be well within its production means as it has a processing capacity of 1.8m tons. “It all begs the question,” Strydom stressed, “why we don’t use our surplus to fulfil local demand for soya oilcake seeing as South Africa, for some strange reason, imports most of the raw product used for producing plant fodder and cooking oil.”
He pointed out that if these imports could be replaced there would be an additional demand of several hundred thousand tons. Better still, South Africa could possibly benefit from China’s decision to impose a 25% tariff on soya beans imported from the US, formerly its biggest supplier of the crop. The tariff, instituted in retaliation for US President Donald Trump’s persistence to raise penalties on Chinese goods, has hobbled America’s soya sector and necessitated a $12bn bailout recently for farmers suddenly finding themselves landed with stock they couldn’t move. Interestingly, Brazil’s agricultural sector was quick off the mark to sashay into position and replace the US as China’s main source of soya.
But despite its capacity to ship bean bulk at short notice, Brazil is already falling short of Chinese demand. Why then is South Africa, which is geographically much closer to China and with surplus stock at the ready, not seizing an opportunity to export soya beans to China? Strydom emphasised that it came down to three key requirements: the two Brics partners must finalise access regulations, the local level of oil in soya must be raised to 18%, and South Africa must become more price competitive.
“Nevertheless, the prospect of possible exports is in the pipeline, especially now that available stock in South America is depleting,” Strydom said. “In essence, if the regulations are in place and price is favourable given oil content, then exports will take place.”
The prospect of possible exports is in the pipeline, especially now that available stock in South America is depleting. – Dr Dirk Strydom
