SA grain industry shares notes with French counterparts

Estimated reading time: 6 minutes

  • EMC2, a French agricultural co-operative from Lorraine in France, approached AFGRI with a request to visit their facilities in order to learn more about the grain storage protocol for silos in South Africa.
  • EMC2 aims to support the Lorraine region’s producers when it comes to crop and animal production. The company offers support through crop protection, product procurement, crop storage, agronomic advice and seed production solutions.
  • The South African grain industry faces similar challenges as the French industry, the biggest being the current energy crisis, water supply and logistical problems.
  • A topic that arose during the visit was the protocol regarding the storage of malting barley. France and South Africa both produce malting barley, which is an essential ingredient in beer production. The sufficient storage of malting barley is important to meet the quality requirements of maltsters.

South Africa is one of the maize exporting countries in the world, and has sufficient storage facilities in the form of silos and bunkers. EMC2, a French agricultural co-operative from Lorraine in France, approached AFGRI with a request to visit their facilities in order to learn more about the grain storage protocol for silos in South Africa.

EMC2 aims to support the Lorraine region’s producers when it comes to crop and animal production. The company offers support through crop protection, product procurement, crop storage, agronomic advice and seed production solutions.

The visit to AFGRI included a technical tour of the AFGRI facilities, as well as an introduction to the South African grain and maize markets, and legislation. Compared to France, South Africa is a significant, albeit smaller, maize-export country. In South Africa maize is stored in privately owned silos located at commercial storage operators and on-farm storage. France has only one planting and harvesting season, whereas South Africa has two.

The EMC2 representatives observed how South Africans store multiple harvests efficiently despite only 15% of the crops produced being accrued from irrigated fields.

Get the 2021/2022 wheat crop season survey results.

Learning from the best

AFGRI oversees a diverse portfolio that includes grain management, equipment and financial services. The company celebrates its 100th birthday this year, and is proud of its rich history and flagship storage facilities in Bronkhorstspruit.

Jan de Sousa, operational manager at AFGRI, informed the French delegation of the company’s history and explained AFGRI’s role in the South African grain value chain. He explained their role as a grain storage and management service provider. AFGRI’s 90 storage facilities include 69 silos and 21 bunkers. They manage approximately 5,1 million tons of winter and summer crops annually, ensuring that quality is maintained throughout the storage period. A total of 160 000 tons of winter and summer crops can be stored at the Bronkhorstspruit facility.

De Sousa also explained the genetically modified organism (GMO) protocol employed by AFGRI. This involves storing GMO and non-GMO grains separately, and the procedure involved in cleaning equipment after handling of GMO grains. AFGRI introduced the protocol in 2010, which has since been successfully implemented from seed level.

Together with this strict protocol, AFGRI evaluates all incoming and outgoing grains to ensure crop quality. This forms part of the strict food security regulations the company adheres to. Moreover, their service to clients is of the highest quality – for example, if a client stores grade 1 maize at the Bronkhorstspruit facility, the client will always receive grade 1 maize when requesting a delivery.

The grading of grains is regulated by the South African Department of Agriculture, Land Reform and Rural Development (DALRRD) according to the Agricultural Product Standards Act. De Sousa added that it is important to maintain positive relationships with local government, service suppliers and producers.

Building a future-orientated business is a vital part of success, he said. “The small-scale producer of today might grow to be one of your biggest clients. Planning for the future involves formulating plans to overcome current logistical challenges such as poor road infrastructure and railway transport.”

The South African grain landscape

Wessel Lemmer, general manager of Agbiz Grain, discussed the South African grain industry in more detail. Agbiz Grain was established through the membership of the 12 largest South African commercial grain handling and storage companies, which handle around 70% of the national crop consisting of white and yellow maize, sorghum, wheat, barley, soya beans, sunflower and canola. Agbiz Grain members own 333 silos and the majority of these silos (295) are JSE-approved and registered sites. The total registered capacity concerning JSE products specific to Agbiz Grain members, totals almost 18,3 million tons (18 297 181 tons).

The South African grain industry faces similar challenges as the French industry, the biggest being the current energy
crisis, water supply and logistical problems. The role of Agbiz Grain and Agbiz is to facilitate and assist the development of a sustainable legislative and commercial business environment for the storage operators of grain and oilseeds, and their suppliers of services and goods in the value chain. Agbiz Grain collaborates closely with the respective grain and oilseed forums, commodity trusts, commodity associations, trade associations and national government to ensure sufficient legislation, regulations, protocols and research to assist the grain and oilseed sector.

Lemmer added that the Johannesburg Stock Exchange Commodity Derivatives Market (JSE CDM) operates a derivative market for the purposes of hedging and price discovery. On average, 25% of the total grain and oilseeds market are delivered via JSE certificates to buyers.

Read more about the JSE CDM concept.

Supportive non-profit entities include the South African Grain Information Service (Sagis), the South African Grain Laboratories (SAGL) and the South African Cultivar and Technology Agency (SACTA). SACTA was created as the legitimate central institution which administered the breeding levies for self-pollinated grain and oilseed crops. Agbiz Grain members support these organisations respectively by submitting information, grain and oilseed samples and to collect levies on SACTA’s behalf. Levies are also being collected for Grain SA and the South African Winter Cereals Industry Trust (SAWCIT).

Malting barley storage

A topic that arose during the visit was the protocol regarding the storage of malting barley. France and South Africa both produce malting barley, which is an essential ingredient in beer production. The sufficient storage of malting barley is important to meet the quality requirements of maltsters.

In South Africa, maltsters require that malting barley must be stored between three to 18 months before malting while a 97% germination rate applies throughout this period. In European countries such as Germany a nine-month storage period is applicable at a 95% germination rate. Pierre Zacharias, an EMC2 board member, confirmed that France follows the same protocol as Germany. Lemmer stated that the requirements in South Africa, such as a longer required storage period at a higher germination rate of 97%, indicate that the South African storage sector, compared to France and Germany, is exposed to higher risks and potential financial losses.

Agbiz Grain currently engages with the relevant stakeholders and research institutions involved in the South African malting barley value chain including AB Inbev, the most significant buyer of malting barley in South Africa, on the matter. – Phillip Crafford, Plaas Media

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