Projections of oilcake demand for animal use in 2010, 2015 and 2020
Compiled by JSG Joubert (August 2010)

  1. Introductory notes

    1. During 2009, projections relating to oilcake requirements for animal use were not calculated. BFAP's scenario planning report that should have addressed, inter alia, oilseed crops, was not completed and as the PRF was under the impression that information obtained from the report would be used to calculate oilcake requirements projections, the projections were postponed until completion of the BFAP scenario report.
    2. Upon completion of the BFAP scenario report, the application of data obtained from the BFAP report was considered for use in oilcake requirements projections. Unfortunately, it was not feasible, because the BFAP model included only certain products used by animal feed manufacturers where as various feed components are used to determine the projection basis.
    3. Information contained in the BFAP model may be used to verify certain information in the oilcake projection model. These include per capita consumption figures, income elasticity, income growth and population growth.
    4. In contrast to previous cases, the Nieuwoudt/McGuigan model was used to project oilcake requirements from start, as opposed to projecting the total protein requirements. The PRF is mainly interested in the oilcake requirements and therefore the fishmeal, poultry byproducts and gluten were removed from the equation, to calculate a pure oilcake projection. In this process, the mentioned nonoilcake proteins were removed from the basis for calculating the projection.
    5. As in the past, the APR model was used to calculate the total oilcake consumption for the 2008/09 basis year, according to the minimum cost linear programming technique. Then it was allocated according to species. To achieve this objective, it was decided to use the actual oilcake quantities published in the AFMA 2008/2009 annual report as basis for further projections. However, the APR model was used to allocate the information according to animal species. It is interesting to note that, on a theoretical basis, the oilcake quantities consumed according to the APR model only differed by 1,4% from the quantities actually used in the basis year as published in the AFMA annual report.
    6. Other variables required for projections, such as population growth, income elasticity and income growth (all according to population group) were obtained from the BMR Unisa.

      Table 1

      Total oilcake consumption per animal species for 2011/2012
      Species Sunflowers Peanuts Soy Cotton Canola Lupins Total
      Tonnes
      Broiler chickens 0 0 605 934 0 0 0 605 934
      Broiler chicken breeding parents 22 523 0 92 467 9 657 329 0 124 977
      Laying hens 57 746 0 113 538 1 107 1 120 0 173 513
      Sheep 17 086 0 0 7 143 0 0 24 230
      Cattle 43 238 0 0 49 415 0 0 92 653
      Pigs 45 837 0 102 220 0 10 068 0 158 126
      Dairy 118 275 0 114 011 85 564 4 846 14 000 336 698
      Ostrich 5 892 0 2 124 207 4 254 0 12 479
      Horses 18 254 0 7 562 332 940 0 27 090
      Aquaculture 0 0 456 0 0 0 456
      Dogs and cats 35 903 0 72 854 0 0 0 108 758
      Total 364 754 0 1 111 172 153 429 21 560 14 000 1 664 915

      Footnote: Information obtained from AFMA 2008/2009 annual report. Distribution per animal species per APR Model.

  2. Projected oilcake requirements

    1. The 2008/2009 period used as basis year, coincides with the AFMA marketing year and relates to the period 1 April 2008 to 31 March 2009. While preparing this report, the latest official AFMA annual report had not been released yet.
    2. The total oilcake consumption for the basis year mentioned above, is 1 664 915 tonnes. Please note that the oilcake consumption includes fullfat products that were converted to oilcake equivalent in the calculations.
    3. The 2010, 2015 and 2020 projections were based on four (4) scenarios:
      • High income growth and keeping protective tariffs in place.
      • High income growth and phasing out protective tariffs.
      • Low income growth and keeping protective tariffs in place.
      • Low income growth and phasing out protective tariffs.

      Table 2

      Income growth
      Asians Urban blacks Rural blacks Coloureds Whites
      Low % 2.2 1.8 -0.6 1.5 2.5
      High % 4.0 3.5  0.0 2.0 4.0

      The income growth figures in Table 2 were used, inter alia, as variables in the projections calculated for Table 3.

      Table 3

      Oilcake requirements projections for 2010, 2015 and 2020 according to four (4) different scenarios ¹
      Scenario Base year 2008/2009 Annual growth from base year Projection 2010 Annual growth from base year Projection 2015 Annual growth from base year Projection 2020
      % Tonnes % Tonnes % Tonnes
      Scenario 1 1 664 915 3.05 1 767 952 2.3 1 948 485 2.12 2 141 758
      Scenario 2 1 664 915 2.48 1 583 450 0.4 1 713 779 0.91 1 856 219
      Scenario 3 1 664 915 2.30 1 742 320 1.5 1 851 352 1.38 1 961 667
      Scenario 4 1 664 915 -3.02 1 565 985 -0.2 1 645 915 0.31 1 727 515

      ¹   Scenario 1: High income growth keeping protective tariffs in place.
      Scenario 2: High income growth phasing out protective tariffs.
      Scenario 3: Low income growth keeping protective tariffs in place.
      Scenario 4: Low income growth phasing out protective tariffs.

      Table 4

      Annual population growth from 2008 ¹
      Asian Coloured White Black urban Black rural Black total Total population
      % per annum
      To 2015 -1.17 0.53 1.75 -0.04 0.38 0.13 0.20
      To 2020 -0.65 -0.17 0.86 0.21 0.45 0.31 0.30

  3. Oilcake demand and supply

    The objectives of the report include a comparison of local oilcake production and the demand thereof and also comparing future projected demand.

    For this exercise, the assumed projected figures are those recorded for scenario one (1). Protection tariffs still apply to livestock products and remained the same over approximately 15 years.

    The figures calculated for scenario three (3), do not differ significantly from those calculated for scenario one (1). Income growth tariffs provided by the Unisa BMR, for the black population, comprising the largest population section, are much lower than the tariffs used for the 2008 report.

    In the 2008/09 basis year, the actual consumption of oilcake, according to the AFMA annual report, was 1 664 915 tonnes and local production of oilcake 565 181 tonnes, 33,9% of total consumption. The unpublished 2009/2010 AFMA annual report shows that the oilcake consumption was 1 743 137 tonnes and local production 701 031 tonnes, or 40,2% of total consumption. Table 5 shows locally produced oilcake expressed as a percentage of total consumption for the past four (4) seasons.

    Table 5

    Locally produced oilcake as percentage of total consumption
    Period Locally produced oilcake Total oilcake consumption Percentage of total consumption
    Tonnes Tonnes %
    2006 / 2007 608 370 1 635 525 37.2
    2007 / 2008 494 557 1 758 185 28.1
    2008 / 2009 565 181 1 664 927 33.9
    2009 / 2010 ** 701 031 1 743 137 40.2
    Average 592 285 1 700 444 34.8

    ** 140 000 tonnes soybeans exported

    Table 5 clearly illustrates the gap between consumption of oilcake and local production of oilcake. To mitigate the effects of aspects including climate and price ratios within a single season, the average figures for the past four (4) seasons are used to determine what the annual increase in local production should be to reduce the gap between consumption and production.

  4. Required increase tariffs for local soy production to provide for projected consumption

    It is important to use the above information to determine the annual rate at which local production of oilcake should increase to provide for about 35% of total demand.

    It is a PRF objective, through its actions, to replace imported oilcake with locally produced oilcake. It is therefore also important to determine the annual tariffs at which local production of oilcake should increase to narrow the gap between local production and projected consumption. Lastly, it could determine the percentage at which locally produced oilcake would provide for the projected 2015 and 2020 consumption, if local production were to grow at the historical annual growth rate (see Table 8).

    Table 6

    Percentage growth in local oilcake production to reach certain targets in terms of projected consumption in 2015
    Projected consumption 2015 Required annual growth rate for local production from 592 285 Oilcake quantity Percentage of projected consumption
    Tonnes % Tonnes %
    1 948 485 2.03 681 970 35
    1 948 485 7.37 974 242 50
    1 948 485 14.83 1 558 788 80
    1 948 485 18.54 1 948 485 100
    Local growth at historic rate
    1 948 485 6.40 914 370 47

    Table 7

    Percentage growth in local oilcake production to reach certain targets in terms of projected consumption in 2020
    Projected consumption 2020 Required annual growth rate for local production from 592 285 Oilcake quantity Percentage of projected consumption
    Tonnes % Tonnes %
    2 141 758 1.98 749 615 35
    2 141 758 5.06 1 070 879 50
    2 141 758 9.26 1 713 406 80
    2 141 758 11.31 2 141 758 100
    Local growth at historic rate
    2 141 758 6.40 1 246 896 58

    Table 8

    Production and consumer trends for protein commodities
    96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11
    COMMODITIES: Fishmeal consumption (tonnes)
    196 039 187 374 96 267 127 386 142 848 118 414 82 988 127 000 127 000 80 000 60 000 55 000 79 500    
    AVERAGE ANNUAL GROWTH %: -2.36
    COMMODITY: Fishmeal production (tonnes)
    78 430 100 000 88 340 95 000 110 000 128 000 123 000 122 000 132 000 101 000 87 000 91 700 82 500    
    AVERAGE ANNUAL GROWTH %: 1.42
    COMMODITY: Fishmeal imports (tonnes)
    117 809 87 374 7 927 32 386 32 848 0 0 0 0 0     80 000 60 000  
    AVERAGE ANNUAL GROWTH %: 48.30
    COMMODITY: Oilcake consumption (tonnes)
    832 600 785 401 1 080 354 1 063 338 1 021 862 1 149 224 1 210 396 1 121 460 1 212 593 1 414 338 1 635 525 1 758 185 1 664 927 1 743 137  
    AVERAGE ANNUAL GROWTH %: 6.47
    COMMODITY: Oilcake production (tonnes)
    400 675 319 006 493 581 554 903 514 020 482 448 472 311 489 413 416 736 572 231 608 370 494 557 565 181 701 031  
    AVERAGE ANNUAL GROWTH %: 6.40
    COMMODITY: Oilcake imports (tonnes)
    431 925 466 395 586 773 508 435 507 842 666 776 738 085 632 047 795 857 842 107 1 027 155 1 263 628 1 099 746 1 042 106  
    AVERAGE ANNUAL GROWTH %: 8.19
    AREA PLANTED (ha)
    COMMODITY: Soy (ha)
    87 000 125 000 130 500 93 787 134 150 124 150 100 150 135 000 150 000 240 570 183 000 165 800 237 750 311 450  
    AVERAGE ANNUAL GROWTH %: 14.12
    COMMODITY: Sweet lupins (ha)
    NA NA 16 300 19 000 14 705 14 785 11 000 10 100 7 100 14 100 16 000 14 000      
    AVERAGE ANNUAL GROWTH %: 3.40
    COMMODITY: Canola (ha)
    NA NA 17 000 25 000 19 145 27 000 33 000 44 200 44 250 40 200 32 000 33 260 34 000 35 060  
    AVERAGE ANNUAL GROWTH %: 9.15
    PRODUCTION (tonnes)
    COMMODITY: Soy (tonnes)
    76 806 120 000 200 900 188 367 148 720 209 705 216 000 136 500 220 000 272 500 424 000 205 000 282 000 516 000 587 950
    AVERAGE ANNUAL GROWTH %: 23.36
    COMMODITY: Sweet lupins (tonnes)
    NA NA 9 000 13 000 17 360 16 338 11 700 4 040 3 950 14 100 14 400 13 300      
    AVERAGE ANNUAL GROWTH %: 25.27
    COMMODITY: Canola (tonnes)
    8 734 11 000 21 000 23 000 26 549 25 750 37 975 40 770 32 000 44 200 38 050 39 840 30 800 40 350  
    AVERAGE ANNUAL GROWTH %: 16.10

    Figure 1

    Oilcake consumption, production and imports

    Graph showing oilcake consumption, production and imports

    Figure 2

    Areas and production of protein commodities

    Graph showing areas and production of protein commodities

  5. A few remarks and conclusions

    1. Projections for the 2015 and 2020 years are included in this report, unlike previous reports for years 2010 and 2020. In September 2010 the actual figures for 2010 will be available. Provisional figures shown in the 2009/2010 AFMA annual report to be published in due course, indicate that the oilcake consumption for the particular year was 1 743 137 tonnes. The projection for 2010, cor­respond­ing with the 2010/2011 AFMA year, is 1 767 952 tonnes oilcake, showing that the models are credible.
    2. The projected oilcake consumption for 2020 shown in this report is significantly lower than the projected figures shown in the report prepared in March 2008.

      The 2008 report showed 2 681 414 tonnes for scenario 1, compared to 2 141 758 tonnes for scenario 1 in this report. This report refers to the lower income growth tariffs released by BMR. The total population growth tariffs, adjusted regularly by SA Statistics, are also lower than those shown in the 2008 report. These variables play an important role and definitely contributed to the deviation.

    3. Table 3 shows clearly that protective tariffs for the import of livestock products for human consumption remain the most important factor determining the demand for protein for animal consumption. A reduction in protective tariffs will reduce the demand for protein for animal consumption and vice versa.
    4. The average annual growth rate in local production of oilcake is marginally higher than that shown in the 2008 report and is still a little lower than the average annual growth rate for consumption. If the mentioned trends do not improve, it will mean that the gap between local consumption and local production will increase and that imports will increase over the periods (see table 8, figures 1 and 2).
    5. The respective growth in the average areas per year, planted with soy and canola are 14,12% and 9,15%. In case of soy, it is higher than that shown in the 2008 report and in case of canola, the annual growth rate is marginally lower than that shown in the 2008 report.
    6. It is important to note, that the average annual growth in yields for the two crops is significantly higher than the corresponding growth in area. Yield per unit area is an important determinant of profitability and it is a huge challenge for the PRF to promote increasing yield and/or cost saving practices.
    7. It is also important to note that the PRF established an objective to produce one (1) million tonnes soybeans by 2015. If this were to be processed locally, it would mean an equivalent of 800 000 tonnes soybean oilcake. Given the fact that soybean oilcake traditionally comprise about 67% of total oilcake, the locally produced oilcake will be 1,194 million tonnes, leaving a deficit of about 754 000 tonnes oilcake in 2015.