Wandile Sihlobo, Agbiz

The African continent is far from being self-sufficient in wheat production. The 2018/2019 wheat imports are estimated at 51 million tons, which is almost double the volume produced in the same season.

This, however, is concentrated in a few countries, namely, Egypt, Algeria and Nigeria which account for more than half of the expected import volume. This is partially explained by the fact that bread is a staple food, specifically in Egypt and Algeria. The other notable wheat importers on the African continent are Morocco, Tunisia, Libya, Kenya, Ethiopia, South Africa and Sudan.

This is likely to remain the key theme over the next couple of years as there are no convincing wheat breeding or production plans in the pipeline in many countries. In South Africa, the wheat industry is currently doing research on ways to boost yields, but the outcome of these efforts might take time to materialise.

The expected 18% annual improvement in South Africa’s wheat production in the 2018/2019 production season to 1,8 million tons has largely been driven by an increase in area planted and expected higher yield following improved weather conditions.

The other countries set to record an uptick in wheat production, albeit remaining net importers, are Algeria and Morocco with the 2018/2019 harvest estimated at 2,9 million tons and 7,3 million tons, respectively.

The import dependency exposes the African continent to shocks in the global wheat market. A case in point is the 2018/2019 production season, where the expected 6% annual decline in global wheat production to 717 million tons could lead to tight supplies and in turn, higher prices. These higher prices might translate to food price increases for the net importing African markets, which could reduce local demand. –Wandile Sihlobo

Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in his update on agricultural commodity markets. Click here for the full report on agri markets for the major commodities.

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