South Africa’s corn stocks fall 11% month-on-month as drought bites

South Africa is chewing through its vast stocks of corn, data for December from the country’s agriculture ministry shows Thursday, as fears mount on the impact of drought on its current crop.

According to the data, South African stocks of white and yellow corn, for food and feed use respectively, fell by nearly 1 million mt.

Stocks at the end of December stood at 8.2 million mt, down from 9.19 million mt at the end of November – a near 11% change.

Deliveries from farms have slowed to a trickle, with 77,838 mt of yellow and white corn supplied in December, versus 4.4 million mt in July, at the height of the harvest.

Seaborne exports of feed corn topped 100,000 mt in December, with the May through December figure reaching just over 1 million mt.

That compares with just 5,353 mt of exports between May and December 2016, according to the data.

Corn utilisation rates have kicked up year-on-year, with 830,513 mt corn consumed, of which 806,953 mt went to the local market, bringing the marketing year total to 6.9 million mt.

For the same period of 2016, December’s local corn consumption stood at 766,573 mt and 6.69 million mt.

Severe drought

After record-breaking harvests in the 2016/17 marketing year, South Africa is facing a severe drought with some parts of the country experiencing ten percent of the rain they normally receive.

Rainfall across the country’s North West province has been well below seasonal averages, with some regions of the province reporting under 10 mm of rain over the last 30 days, data from Grains SA said.

That compares with monthly January average of around 108 mm in the provincial capital of Mahikeng, according to the website climate-date.org.

The country has targeted emerging economies across Asia as potential markets for its feed corn, recently selling to a buy tender for South Korea’s KOCOPIA.

According to the USDA, South Africa's commercial corn crop is estimated at 16 million mt for the 2016/17 marketing year, versus 7.8 million mt for the 2015/16 marketing year - a year that was also heavily affected by drought. 

Currently, corn production for the country in 2017/18 is forecasted at 12.5 million mt in total, according to the USDA.