The Agricultural Business Chamber (Agbiz) said it estimates that wheat imports could increase by 33 percent year-on-year (y/y) in South Africa in the 2019-20 season as agricultural supply chains and uncertainty caused by Covid-19 outbreak continue to cause panic globally.  

Wandile Sihlobo, a chief economist at Agbiz, said in a note yesterday that as the chamber mentioned before in its earlier updates that South Africa is a net importer of wheat. 

“We estimate that 2019-20 wheat imports could increase by 33 percent y/y to 1.8 million tons. This is 13 percent higher than the five-year average import volume, exacerbated by the decline in domestic wheat production on the back of unfavourable weather conditions in parts of the Western Cape in late 2019,” Sihlobo said. 

According to GrainSA, South Africa produces an average of 1.7 million tons of wheat annually, while the annual average total commercial demand for wheat amounts to just more than 3 million tons. 

“In order to meet total commercial demand, South Africa relies on imports which are usually between 40 percent to 50 percent of local consumption,” GrainSA said. 

Sihlobo added that as of April 17, South Africa had imported 804 335 tons of wheat, which equates to 45 percent of the volume the country intends to bring into its shores within the 2019-20 season. 
“The leading suppliers thus far are Germany, Lithuania, Poland, Latvia, Ukraine and Russia. These import requirements essentially account for half of South Africa’s annual requirements, hence it is important to monitor developments in the global market. While the export restrictions are unsettling and typically lead to upticks in prices, we are at ease with the expectation that Russia is expecting a bigger harvest and export restrictions might not be necessary,” he said.