Africa is not a major player in global soybean production yet, with total output averaging 2.4 million tonnes – 90% of which is produced by South Africa, Nigeria, Zambia, Malawi, Benin and Zimbabwe. Africa’s total production makes up a mere 1% in global soybean production of 341 million tonnes.

Some of the aforementioned countries particularly South Africa have seen tremendous growth in area and output –  with area planting increasing from 6 000 hectares to 573 950 hectares, while production increased from 1 500 tonnes to 1.2 million tonnes – over seven decades. In fact, the 2016/17 crop is set to be the largest crop on record. Underpinning this growth has been improved seed varieties, as well as better farming practices, particularly at the turn of the millennium when South Africa adopted GM varieties.

The improvement on seed varieties and better farming practices is evident on yield levels, which increased from 0.41 tonnes per hectare in 1946/47 to around 2.03 tonnes per hectare in the 2016/17 season.

This exponential growth in soybean production has been driven, to a large degree, by an increase in demand for animal feed, which in turn, has been spurred on by an increase in demand for high protein food – especially within the growing middle class.

Seeing large volumes of soybean oilcake imports of close to one million tonnes in 2010, South African government and private sector jointly invested in crushing plants, with an intention to stimulate domestic soybean production. The national soybean crushing capacity was then roughly 600 000 tonnes, and the new crushing capacity is estimated at 1.7 million tonnes, putting the total national crushing capacity at approximately 2.3 million tonnes.

While the country is currently utilising below 50% of this capacity, the recent improvements in production are a reflection of the positive outcome of this investment decision. An observation on domestic soybean production data shows that production increases over the years were modest, up until 2010/11 production season, where output jumped from roughly 560 000 tonnes to levels above 700 000 tonnes and has since maintained an upward trend.

From a trade perspective, there has been a notable improvement, soybean oilcake imports fell from levels close to one million tonnes in 2010 to just below 500 000 tonnes in 2015.

As with soybean oilcake imports, soybean oil imports have maintained a decreasing trend, from levels around 260 000 tonnes in 2010 to around 170 000 tonnes in 2015. In fact, these trends are expected to prevail this season.

With regards to actual soybeans trade, South Africa is set to be a net exporter this season, with exports estimated at 6 000 tonnes, down by 12% from the previous season. More importantly, there will not be any imports this season, which is a significant improvement from a 271 098 tonnes imports in the 2016/17 marketing season.

Overall, while Africa remains a small player in the global soybean market, there are encouraging developments on a country level. With the expected growth in incomes across the continent over the coming years and the demand for high protein foods thereof, African soybean market stands a good chance of seeing positive growth.

ENQUIRIES:
Wandile Sihlobo
E-mail: wandile@agbiz.co.za