South Africa Seeking Corn Markets in Asia to Drain Surplus, Targets Korea

South Africa is exporting corn to South Korea for the first time in at least eight years as its seeks new markets to drain a record grain surplus.

The country last week shipped 48,803 metric tons of yellow corn to South Korea, bringing shipments to the country to 158,066 tons in the marketing year that began May 1, according to the Pretoria-based South African Grain Information Service. It is also selling corn to West Africa, adding to traditional markets in neighboring countries.

“It’s a way of clearing the surplus,” Werner Lindeque, a commodity trader at George, South Africa-based RMD Financial Services, said in an interview today. “Our biggest problem was that Africa more or less had enough corn. The East is opening up a bit.”

South Africa’s corn crop, which has mostly been harvested, is expected to be 13.09 million metric tons this year, the government’s Crop Estimates Committee said on Aug. 24. That’s the highest since the 14.42 million tons reaped in 1982 and comes after crops of over 12 million tons in both 2009 and 2008.

As of the end of July South Africa’s corn stockpiles had risen 18 percent from the year earlier to 9.36 million metric tons. Of that 5.9 million tons is in the form of white corn while 3.47 million tons is yellow. In South Africa white corn is used to make corn meal, a staple food, while yellow corn is mainly fed to animals.

Zambia, Malawi, Zimbabwe

So far this marketing year South Africa has exported 242,814 tons of yellow corn, of which 65 percent has gone to South Korea, 17 percent to Kuwait and the rest to eight African countries. That compares with 261,608 tons of yellow corn in the whole of the last financial year of which 63 percent went to African countries.

This year Malawi and Zambia have declared corn surpluses while Zimbabwe’s corn production is expected to rise 38 percent, according to the U.S. Department of Agriculture.

Last week South Africa also exported 12,500 tons of white corn to Niger, the first exports to the country in at least eight years, and shipped white corn to Guinea, a country it last sent corn to in the 2008/2009 season.

South Africa has exported 226,514 tons of white corn so far this marketing year to 12 African countries compared with 1.41 million tons last year to 11 African countries.

South Africa is Africa’s biggest corn producer.

To contact the reporter on this story: Ron Derby in Johannesburg at rderby1@bloomberg.net

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