Can SA expand its maize export footprint in China?

China cancelled US maize orders and purchased of the South African maize. This was a volume of 108 104 tonnes of maize from South Africa in the last week of March and the first few weeks of April 2023. This activity formed part of South Africa’s maize exports in the 2022/23 marketing year. Some interpreted this market activity as China replacing the United States with South African maize as part of the broader geopolitical matter.

We think such a view may be an overstatement. First, South African maize is currently competitively priced, and it is of good quality, and this might have influenced China’s decision. Second, this was not the first time China bought South African maize, but the volumes were always small in the past. For example, China’s maize imports from South Africa averaged 3 780 tonnes per annum over the past ten years. This was only the first time China imported a large volumes in recent memory.

Third, one consider South Africa’s 2022/23 total maize exports of 3,64 million tonnes, China’s recent purchase of 108 104 tonnes is a relatively small volume. South Africa’s leading export markets for maize include Taiwan, Japan, Vietnam, Mexico, Italy, South Korea, Botswana, Zimbabwe, and various markets within the African continent. One should also remember that China is a large maize producer, accounting for 22% of global maize production, an average of 277 million tonnes. Still, because of their significant usage, China imports maize from the world market.

Over the past three seasons, China’s maize imports averaged 25 million tonnes a year. The leading suppliers of maize to China included the United States, Ukraine, Bulgaria, Russia and Kazakhstan, and South Africa. Therefore, we doubts that South Africa’s recent maize exports to China are an attempt to replace the U.S., as some media houses have argued.

One has to appreciate that the U.S. maize exports to China averaged 17 million tonnes yearly in the past two seasons. This far exceeds South Africa’s total maize production of 15,9 million tonnes this year. In good seasons, South Africa’s maize exports are usually just over 3 million tonnes to a range of markets. Hence, we believe China’s recent maize imports from South Africa were a general market activity, i.e., supply diversification, and one shouldn’t read too much into it.

My writing on agricultural economic matters are available on my blog:

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli
15 May English South Africa Investing · Food

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