World Grain - August 2018 - 60

FEED QUARTERLY: SOUTH AFRICA PET FOOD INDUSTRY GROWING

In 2016, South Africa's value of imported and
exported pet foods was estimated at
$40 million and $20 million, respectively.
- Global Trade Atlas
million, respectively, by the Global Trade Atlas statistics, a global merchandise trade statistics database. The
United States, France and the Netherlands contributed
75% of the total pet food imports, according to the U.S.
Department of Agriculture (USDA).
The pet food importation is allowed under South
Africa's Farm Feed Regulation Act 36 of 1947 that allows importation of the products on condition the imports comply with the regulation. In addition, the pet
food importer must be a company registered in South
Africa or a citizen.
In addition, the Pet Food Industry Association of
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high quality nutritional standards of pets, also ensures
compliance with stipulated regulations by randomly
and regularly purchasing pet foods in the market and
subjecting them to independent laboratory tests.
According to the PFI, pet food products that fail to
meet the stringent laboratory tests parameters and industry registered requirements would lead the manufacturer being "reported to the Registrar of Act 36 for
legal action."
WHEAT PRODUCTION LAGGING
The current demand and supply trends of South Africa's
pet food market conceals strong undercurrents that
have characterized the entire industry value chain, especially the production of grains in this country where
the agricultural sector grew by more than 22% and contributed 0.4% to the gross domestic product.
Although the country's agricultural sector has posted
steady growth since 2015, the wheat sub-sector, a key
cereal ingredient in the country's pet food industry, has
recorded mixed performance in the recent past largely because of the effects of the liberalization of the wheat market and adverse weather conditions in key growing areas.
The Food and Agriculture Organization attributed
the drop in South Africa's cereal production from
18,808,000 tonnes in 2017 to 15,480,000 tonnes early
this year to "price induced contraction in plantings."
The UN agency said total commercial plantings declined by 12% on a yearly basis and lower yields due to
an extended period of below average rainfall in January
and early February.
60

The FAO said South Africa's winter wheat crop is
expected to be harvested in October after the country's "favorable rains in the main western growing reJLRQVDQGLPSURYHGPRLVWXUHOHYHOVDQGEHQH¿WHGFURS
development."
"Continued favorable rains are predicted over the
main wheat-growing Western Cape province from July
through September, boosting production outlook," the
FAO said.
The global food agency has predicted a "slight increase in production compared to the below-average
output of the previous year."
The expected slight increase in wheat production is
expected to impact the pet food market in South Africa,
especially because grains represent between 40% to
70% of the volume of pet food rations.
However, ensuring a stable future supply of the grains
to fuel the pet food market largely would depend on how
the government and private sector respond to an emergLQJWUHQGRIIDOOLQJSUR¿WDELOLW\RIWKHZKHDWFURS
"Declining trend in hectares planted with wheat will
continue in 2018-19, mainly due to the crop's decreasLQJ SUR¿WDELOLW\´ VDLG WKH ODWHVW UHSRUW E\ WKH 86'$
on South Africa's grains industry, which also notes a
decrease of 1 million hectares under wheat compared
to 20 years.
"Producers will plant 480,000 hectares of wheat,
which could on average yields realize a wheat crop of
about 1.7 million tonnes," the USDA said.
In February of this year, South Africa's Crop Estimate
Committee estimated wheat production to be about 1.5
million tonnes for the 2017-18 year, which is a 20%
drop from the previous year. The decline in production
has been attributed to the severe drought in the Western
Cape province where nearly 75% of the crop is grown.
PET FOOD MAKERS OPTIMISTIC
Despite the decline in wheat production in South
Africa, pet food makers in the country, of which nearly
65% of them are members of PFI, are optimistic the
market will keep growing into the future.
6RPHRIWKHFRPSDQLHVKDYHGH¿HGSROLWLFDODQGHFRnomic trends such as the sacking of South Africa's highly regarded former Finance Minister Pravin Gordhan,
August 2018 / World Grain / www.World-Grain.com
http://www.World-Grain.com
World Grain - August 2018

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