Oct. 7 (Bloomberg) -- South Africa’s plan to source all grain needed for biofuels production locally means sorghum output will have to climb at least fivefold, the nation’s biggest representative of commercial farmers said.
Biofuel must comprise at least 5 percent of diesel and 2 percent to 10 percent of gasoline starting Oct. 1, 2015, Energy Minister Ben Martins said in a Sept. 30 Government Gazette. South Africa’s sorghum harvest probably increased 11 percent to 151,064 tons in the season that ended in April from a year earlier, the Pretoria-based Crop Estimates Committee said in its final forecast on Sept. 26.
“We need an additional volume of 620,000 tons of sorghum to produce enough bioethanol to meet the 2 percent inclusion rate,” Wessel Lemmer, a senior economist at Grain South Africa, said in an e-mail. That would equate to output of about 771,000 metric tons. “The grains need to be produced locally, providing additional jobs in the value chain.”
Forty-seven percent of South Africa’s sorghum, the country’s biggest summer crop after corn, soybean and sunflower seed, is grown in the Free State province, according to the committee. The grain is used as a staple food in some rural communities, livestock feed and to make traditional beer.
“Food security, in terms of availability or affordability, will not be impacted negatively,” Lemmer said.
One ton of sorghum produces about 400 liters (106 gallons) to 440 liters of bioethanol, according to Lemmer.
Sorghum futures rose 1.5 percent to 3,350 rand ($333) a ton on Oct. 4 on the South African Futures Exchange, the highest since at least May 2010. They were unchanged by midday today.
“The biofuels industry will be able to offer competitive prices for sorghum, enabling producers to plant a profitable crop,” said Lemmer. “This will incentivize producers to increase the production of sorghum.”
In August last year, Grain SA estimated sorghum production would have to increase by 600,000 tons.
The only available starch crop for bioethanol is sorghum, while for biodiesel soybean, sunflower seed and canola can be used, Lemmer. Corn, one of the country’s staple foods, has been excluded from bioethanol production, he said.
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