Research Report 2000/2001



Short and medium term demand for fishmeal and oilcake

During the marketing year extending from April 1999 to 31 March 2000 demand for fishmeal amounted to 127 386 ton and for oilcake 1 063 338 ton. These figures represent the quantities that are largely consumed in the commercial market. Soya comprises 49% of the oilcake that is consumed while monogastrics (poultry and pigs) consumed 69% of available oilcake in rations. For the preceding period (1 April 1998 to 31 March 1999) the corresponding figures were 96 267 ton fishmeal and 1 080 354 ton oilcake. It follows therefore that in the year under review fishmeal consumption increased by 31 119 ton compared to the previous year while oilcake consumption declined marginally by 17 016 ton (1,6%). This can be largely attributed to the relatively sharp drop in fishmeal prices compared to the previous report year, as well the fact that soybean prices internationally were relatively stable over the same period.

Local oilcake production was sufficient to meet 52% of the RSA's total requirements during the 1999/2000 marketing year, while in the case of fishmeal this figure was 62,8% if Namibia's production is not taken into account.

Given the 32% higher consumption compared to the previous year, fishmeal imports also increased from 7 927 ton in the1998/99 marketing year to 32 386 ton in the 1999/2000 marketing year. The large quantities of oilcake, especially soya oilcake, which had to be imported had a negative effect on South Africa's trade balance as well as potential job opportunities locally.

It is known that international availability of fishmeal is declining and that an increasing percentage of available fishmeal is being used in the aquaculture industry. This situation emphasises the importance of soya oilcake as source of protein, especially for monogastrics.

International market factors and the influence thereof on local price ratios between commodities have an impact on the decision-making process of producers in terms of which commodities and how much they will plant. These factors, in turn, have a tremendous influence – positive and negative – on the PRF's efforts to achieve its goals. During 1999 producers planted more maize and less soya because of relatively high maize prices, which meant that only 93 787 ha were planted to soya compared to 130 500 ha the previous year – resulting in a soybean crop of only 148 720 ton. The situation has improved in the meantime – 129 050 ha were planted to soybeans in the 2000 planting season, with an expected crop of 192 705 ton in the next report year.

These enormous fluctuations in year-to-year plantings per hectare can to a large extent be addressed by using soya as a rotational crop on a sustained basis in a producer's farming system. To this end, the PRF contracted experts at the UOFS to conduct a study on the economic benefits of soybeans in a rotational cropping system. The results of the study will probably become available during the next report year.

Projections of oilcake requirements for the year 2010 at different scenarios indicate that, if local oilcake production cannot be increased significantly, 750 000 to 900 000 ton will have to be imported. This confirms the tremendous challenges that the PRF faces if it wants to achieve its objectives.

Good progress was made with oilcake production given the fact that local production had escalated from 232 400 ton in1994/95 to 413 359 ton in 2000/2001 – an annual compounded growth rate of 19,01%. Growth in oilcake consumption over the same period was 16,09%. With regard to soya oilcake production, the figure was 40 000 ton in 1994/95 compared to an estimated 101 921 ton for 2000/2001. This represents an annual compounded growth rate of 26,41%. Annual growth in soya oilcake consumption over the same period was 17,68%.

In an article by Dr M. Griessel he estimates local production of soya oilcake equivalent for 2000/2001 at 96 000 ton. At a lower population growth (due to AIDS) he estimates soya oilcake requirements for the year 2010 at 620 096 ton. If it is our goal to meet 50% of our soya oilcake needs with local production (310 018 ton) by the year 2010, it will mean that soybean production must increase by 13,91% per annum. A goal of 80% and 100% will necessitate annual growth rates of 20,2% and 23,03% respectively.

Given this situation, the previous report referred to other protein-rich crops that could be considered. In this regard reference can be made to a comprehensive study on the lucern industry, detail of which is given elsewhere in this report.