South African corn farmers are cashing-in on heightened global demand for their grain and substantially increasing exports on the back of their second consecutive bumper harvest.
The corn crop had an excellent start due to widespread rains in October and November 2020, which facilitated a timely plant.
It then received favourable late-season weather conditions to boost final yields.
Harvest in the east of the country has been underway for several weeks, and the later western areas are about to move into full gear.
Dry conditions across much of South Africa in late May have benefited harvest progress and crop quality. All going well, all headers will be parked-up by the end of June.
South Africa's Crop Estimates Committee (CEC) is forecasting corn production at 16.18 million tonnes, which would be up 5.8 per cent from the 15.3 million tonnes harvested last season.
The updated estimate is marginally higher than the CEC's April forecast of 16.095 million tonnes - and was at the low end of industry expectations.
It will be the country's second biggest commercial corn crop on record, just below the 17.55 million tonnes it produced in the 2016-17 season - and would relegate the 2020 crop to third place.
The total area planted to commercial corn in South Africa in 2020 was 2.755 million hectares, which was about 5 per cent higher than its 2019 program.
At planting time last year, domestic corn prices in that country were trading about 30 per cent higher than in late 2019.
This provided growers with an attractive incentive to increase plantings year-on-year.
Corn prices fell moderately between January and April this year, primarily driven by the favourable domestic supply conditions.
The downward pressure more than outweighed the effects of the high international prices and a weakening of the national currency.
About 61.4 per cent - or 1.692 million hectares - is planted to white corn and 38.6 per cent - or 1.063 million hectares - is planted to yellow corn.
If white corn crops have an average yield of 5.31 tonnes per hectare, production is expected to be 8.982 million tonnes - or 55.5 per cent of the total crop.
The average yellow corn yield is predicted to be higher at 6.77t/ha and output at 7.198 million tonnes - or 44.5 per cent of total output.
If realised, this would be the biggest ever yellow corn crop.
Non-commercial, or subsistence, corn production is forecast to be almost 587,000 tonnes, which is up 7.9 per cent from just under 544,000 tonnes last season.
The area is also up sharply to more than 319,000ha, which is 7.4 per cent higher than the 297,000ha planted in 2019.
Corn produced by South Africa's subsistence farmers is generally consumed by humans or animals on the producing farm and does not go into the domestic or export supply chain.
Like so many countries globally, the COVID-19 pandemic has hit the South African economy very hard.
Economic growth has been on a downward trend for the past 10 years.
Unemployment is above 30 per cent and, due to COVID-19 challenges, it is expected to remain sluggish for the foreseeable future.
Consumption of corn in South Africa has increased by an average of more than 2 per cent per annum during the past 10 years, powered by an increase in demand from both the human consumption and animal feed sectors.
Domestic demand in the 2021-22 marketing year, which is May 2021 to April 2022, is expected to be about 11.7 million tonnes.
White corn demand is expected to be 6.45 million tonnes - or 55 per cent - and yellow corn is predicted to be 5.25 million tonnes - or 45 per cent.
In the form of a meal known as mielie, or maize pap, white corn is the staple food for many South African consumers - especially for lower-income households, as it is a relatively inexpensive source of carbohydrates.
The grain is mixed with water until a smooth, porridge-like consistency is achieved.
It can be enjoyed for breakfast as a smooth, sweet porridge, or made firmer for lunch and dinner and served with vegetables or meat.
On the other hand, yellow corn is the primary ingredient for stockfeed rations, particularly in the poultry sector.
Intake of chicken meat has increased substantially in South Africa because it is the cheapest, and now the most important, source of protein in the diet.
Higher chicken meat demand has driven considerable expansion in the local broiler industry in recent years, which is manifesting in burgeoning domestic demand for yellow corn.
The jump in domestic production and relative competitiveness on the international stage is expected to result in South Africa's corn exports surging by 40 per cent to 3.5 million tonnes in the 2021-22 marketing year.
That follows a 72 per cent increase - to 2.5 million tonnes - in the marketing year just finished.
High international prices have helped push domestic values above export parity, which has increased the incentive to export the country's production surplus.
South Africa is well placed to supply neighbours in the southern African region.
Zimbabwe, Botswana, Namibia, Mozambique and Eswatini all share a border with South Africa and are established destinations.
But they are also expected to have above-average production this year, thereby reducing imports.
Consequently, deep-sea exports to traditional Asian buyers - such as South Korea, Taiwan, Japan and Vietnam - and possibly some Mediterranean destinations, are expected to figure more prominently in export bookings ahead of the Northern Hemisphere harvest later this year.
