Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in his update on agricultural commodity markets. 

SA soya bean oil and oilcake imports on a decline, but crushing plants not yet functioning at full capacity.

One of South Africa’s key objectives behind the expansion of the soya bean crushing plants was import substitution of soya bean oil and oilcake. The country has made notable progress on both products as imports have been on a decline in the past few years due to increasing domestic production.

Between 2010 and 2017 South Africa’s soya bean oilcake imports declined by 42% to 553 003 tons. We estimate that the 2018 soya bean oilcake imports could decline further by 17% from last year to 458 992 tons due to expected large soya bean production.

South Africa’s soya bean oil imports declined by 30% between 2010 and 2017 to 191 255 tons. We believe that the 2018 soya bean oil imports could decline by a percentage point from last year to 189 342 tons, also supported by an uptick in local soya bean production, estimated at a record level of 1.39 million tons.

With all the aforementioned improvements, the sector hasn’t fully utilised its soya bean crushing capacity. Using an estimate of 2.2 million tons of South Africa’s soya bean crushing capacity, which equates to 183 333 tons per month, the country utilised 43% of its monthly soya bean processing capacity in February 2018, which is, nonetheless, double the capacity utilised in February 2017.

Over the past two years, the sector has utilised, on average, about 40% of its monthly crushing capacity due to a combination of factors, which include relatively lower domestic soya bean supplies, amongst others.

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