The soybean industry, like many commodities in South Africa, is going through a rough patch that could lead to job losses and a negative impact on the economy.
Soybeans play a significant role in global agriculture due to their economic, nutritional, and environmental benefits and in recent years, they had been a booming commodity in South Africa.
Dr André van der Vyver, the executive director at the South African Cereals and Oilseed Trade Association, said while the industry has been doing well, there are alarming concerns that could bring oybeans farming to its knees.
The highs and lows
“The soybean industry, after many years of growth, has during the last two years started to export profitably and, barring a drought like 2024, will continue to grow.
“Unfortunately, and because of the drought and a reduced soybean crop, we are already experiencing some imports of soybean cake, mainly in the Western and Eastern Cape, and possibly soybeans later in the season. Currently, a normal rainfall season is forecasted during 2024/25 with imports only a temporary setback,” he explained.
Van der Vyver said the logistical routes to the export harbours are challenges threatening the already fragile industry.
“This refers both to rail underperformance and subsequent road over-utilisation. Furthermore, Durban Harbour has reached a saturation point with huge delays and demurrage costs experienced during the last season. Urgent upgrades and investments in facilities and a renewed focus on the Port of East London are required,” he said.
Despite the challenges, Van der Vyver remains optimistic that the industry is going to bounce back and has called on stakeholders to work together to ensure jobs are retained and new farmers enter the market.
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“With normal to higher rainfall, South Africa could expect crops of 2.5 to 3.0 million tons in the future. With such a dynamic industry, the supply routes of beans are no different. Expect traditional supply routes to resume with Durban remaining the most profitable export corridor, particularly from the Eastern Free State, Southern Mpumalanga and KZN.
“However, with soybeans expanding into the Central and Western Free State and North West province, East London Port is ideally positioned to service the export industry. Soybean produced in the Northern Free State, western parts of North West Province and central parts of Mpumalanga will continue to move inland to the crushing plants,” he said.
According to Van der Vyver, some beans from Northeastern Mpumalanga will be exported through Maputo. “Soybean cake will again be sent to the coastal areas, some small quantities of beans and cake will continue to be exported to Zimbabwe and Mozambique.
“All indications are that the local soybean crop will continue to grow and therefore exports as well. This will bring huge benefits to rural communities and South Africa, as a whole,” he said.
Improving the ports
Meanwhile, the chief executive officer of the Road Freight Association, Gavin Kelly, said they are hoping that the R18.85 billion loan given to Transnet by the African Development Bank is going to bring significant changes.
“Whilst this is a move in the right direction, tight management of where the funding is allocated, accountability and fiscal control and real beneficial changes to the operations of Transnet must be closely monitored,” he said.
In addressing the fruit industry gathering this week, Michelle Phillips, group chief executive of Transnet, said they recognise the critical role it plays in supporting the agricultural sector and increasing the viability of exports.
“Port performance, especially in the container sector, is expected to improve through the delivery of critical port equipment.
“Transnet Port Terminals has also entered into long-term contracts with Original Equipment Manufacturer (OEMs) for the supply of new equipment, provision of spares and technical support,” she said.
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