SACOTA – CEC – SAGIS workshop: The importance of accurate maize stock numbers in years of drought

THE IMPORTANCE OF ACCURATE MAIZE STOCK NUMBERS IN YEARS OF DROUGHT

SACOTA members are responsible for nearly all deep-sea imports and exports of maize, soybeans, soybean cake and wheat. This makes up four of the five key commodities to ensure basic food security in South Africa, rice being the fifth commodity. Due to the drought experienced in the 2023/24 production season, prices have already sharply risen and there is a possible shortfall in these commodities. Although wheat and rice are always imported South Africa rarely imports maize. This has last happened in 2017 with the big drought. Since April 2024 South Africa has already imported twelve vessels of yellow maize (YM) from Argentina totalling approximately 270,000 tons. Soybean cake has also been imported and soon soybeans may be added to the list. The big question is, will South Africa have enough white maize (WM)?

The only way to answer this question is for analysts to have easy access and confidence in the data dealing with this topic, namely, crop estimates, deliveries from farms to silos, exports and stocks available. With this in mind, SACOTA hosted officials from the Crop Estimates Committee (CEC) and the SA Grain Information Service (SAGIS) in an information workshop on Tuesday 8 October 2024 to explain the methodology in collecting and verifying the data.

Rona Beukes, Head of Crop Estimates and Marda Scheepers, Senior Statistician Food Security and Crop Estimates explained in detail the methodology followed in determining the crop estimate. This was followed with a presentation by Bernard Schultz, General Manager of SAGIS. He explained the stock audit procedures and confirmed that during their inspections, the SAGIS inspection team verifies the stock in each and every silo complex and each silo bin. If a bin is under fumigation, a valid certificate has to be produced by the operator.

In addition to explaining the methodology followed by both institutions, two issues of concern to the industry were also addressed. The CEC explained the on-farm retentions number. There is a concern that based on the five-year average, WM producer deliveries at this time of the year is approximately 93% of size of the crop estimate. However, currently deliveries are lagging and only approximately 87% were delivered. The 6% difference represents about 363,000 tons of the 8th WM crop estimate of 6.084 million tons. Normally, this would be attributed to on-farm storage. However, this data is very difficult to verify accurately. Data for YM is 85% delivered to date compared to the crop estimate vs. the five-year average of approximately 89.66% at this time of the year. The difference of 4.66% represents 313,000 tons of the 8th crop estimate of 6.72 million tons. The difference with YM is that it is already being imported.

In the meantime, South Africa is logging record cross-border exports of maize, particularly WM, to Zimbabwe since they were impacted even worse by the drought. SAGIS, therefore, were asked how these numbers were accurately recorded and reconciled. The issue relates to who is responsible for declaring the cross-border exports. Given the business opportunities that exist it is not only your traditional registered traders that are exporting but many other entities are this year conducting business, including farmers. Neels Wegner from PPECB, a SACOTA member, also explained the process of issuing export certificates. All maize exported requires a PPECB export certificate before DALRRD issues a phytosanitary certificate – required by the importing country.

AFGRI, another member of SACOTA, also gave input. Jan de Sousa, Head of Grain Storage Operations, confirmed AFGRI’s commitment to service excellence when it comes to outloading. He said where possible, silos will always attempt to exceed the outloading rate required by the JSE of 500 tons per day (applicable to JSE silo certificates), even if it requires additional hours. He invited customers to contact his office and make prior arrangements.

In conclusion, SACOTA members, in the interest of food security, are concerned about future stock availability and access to stock (outloading rates). Transparency and reliability in numbers will go a long way in addressing concerns. Whether or not South Africa will be required to import white (and yellow) maize and soybeans, when and the rate of imports will all depend on these numbers and, of course, local prices. In the meantime, SACOTA is engaging with industry and DALRRD to ensure that access to stock, whether local or imported, is possible in order not to aggravate an already tight stock situation.