South Africa Grain Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

South Africa Grain Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The South African grain market is projected to register a CAGR of 5.9% during the forecast period (2022-2027). The production of grains in South Africa was not affected severely by the onset of the COVID-19 pandemic owing to the listing of grains under essential commodities. The trade movements were impacted shortly due to the restrictions, which were restored shortly. Grains contribute significantly to the agricultural sector in South Africa.

Among the grains, maize is the most prominent field crop in the country. The production of maize has increased from 16,820,000 tons in 2017 to 15,300,000 tons in 2020. The change in consumer behavior towards domestically grown foods coupled with the increased demand for food security has improved the demand for grains in the country. The growth in regional trade, technology, and mechanization advancement in this sector are some of the factors driving the market's growth in the country. Affirmative government policies along with trade policies have impacted the grains market in South Africa.

Key Market TrendsHigh Regional Trade of Grains is Driving the Market

South Africa is one of the major exporters of corn in Africa. Barley, sorghum, and rice are some of the other major grain crops grown in the country. White and yellow corn are the two wide grown corn varieties in the country. According to the International Trade Centre Statistics, in 2020, the total exports of maize from the country were 2.5 million metric tons, compared to 2.2 million metric tons in 2018. Zimbabwe, the Republic of Korea, Botswana, and Taipei Chinese are some of the major importers of South African corn. While the country is a net exporter of maize, it heavily relies on other countries for its Wheat consumption.

South Africa depends on Poland, Russian Federation, Lithuania, and Germany for its Wheat imports. The open free trade agreements made by the South African government with other African countries are promoting the growth of grains in the region. The government is also making agreements, such as The Economic Partnership Agreement (EPA) with the European countries, to expand its presence across other regions. Recently, United States grains council sent a team to South Africa to analyze the conditions for the production of grains like corn in the country. The USDA's Agriculture Trade Promotion Program has employed funds to launch a broader, two-year engagement to expand opportunities for its exporters.

Adoption of Advanced Technologies in Agriculture to Improve Productivity

The demand for various agricultural products, including grains in the country, is increasing owing to the higher demand for food security. Significant investments are being made by the farmers in the agricultural machinery and agrochemical sector of the economy. Such type of productive investments by the farmers in the agricultural inputs market is estimated to drive the agriculture sector.​

Digitalization in agriculture, like the use of Data tools, remote sensing, sensors, and drones, has already begun in the country, which helps in reducing the production cost while increasing productivity. SupPlant, the leading precision agriculture hardware-software solution uses artificial intelligence and cloud-based technology to assist South African farmers with two goals, increasing crop yield and reducing water usage.

Further, the Minister of Agriculture, Forestry, and Fisheries has also outlined the need to integrate AgriTech into farming practices. During the 2021 State of the Nation Address, the government also stated its focus on reducing reliance on imports by 20%, largely in the agriculture sector. To achieve this goal, integrating AgriTech solutions into agricultural practices to increase efficiency has given prominence.

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