Updates on Staple Foods: Sugar and Soybean Production Optimal, Demand For Wheat Rising

Sourcing staple food products from various countries around the world can be a difficult task, but Kenya-based supplier Safse Development Agency manages to make it possible with solid partners in two major exporting countries, South Africa and Thailand.

Founded in 2014, the company sources a variety of products, including both white and brown sugar from India, Brazil, and Thailand, as well as white, brown, red sorghum, soybeans, wheat, and long-grain rice from South Africa. All of Safse Development Agency's products are phytosanitary and SGS certified, of prime quality, adhering to international quality standards.

Optimal Production for Several Staple Products

Production outlooks for several staple food products are expected to be positive for 2019/2020. Global sugar production in 2019/2020 is expected to grow by 2 million metric tons to 181 million metric tons. Global soybean production is also looking good for 2019/2020, at an increase of 3.27 million metric tons to 92.9 million metric tons.

India is currently the world’s largest producing country of sugar, surpassing Brazil in 2018/2019 for the first time in 16 years, supplying 19% of the world’s sugar at 33 million metric tons. Brazil is the second-largest producer and historically the world's largest sugar supplier. Harvest for 2020/2021 in the main producing center and southern regions are expected to be especially good at 597.8 million metric tons, 1.4% larger than the previous year.

Thailand is the world’s second-biggest sugar exporter and fourth-largest producer, producing almost 15 million metric tons in 2018/2019. Safse Development Agency is expecting to meet their average sales volume of 6.5K metric tons for white sugar, and 6.5K metric tons for brown sugar per month in 2020 (sourced from India, Brazil, and Thailand). Both white and brown sugar are priced at USD 400 per metric ton.

South Africa is the largest exporter of agricultural products in Africa, with exports amounting to USD 9.8 billion in 2018, a 6% increase from the previous year, according to the United States Department of Agriculture (USDA). Various types of cereals including wheat play an important role in the country’s agricultural exports.

Safse Development Agency is expecting to meet their yearly export capacity of 3K metric tons of South African white, brown, and red sorghum per month. The company also expects to match its monthly export average of 5K metric tons of soybeans and 4.5K metric tons of long-grain rice. All varieties of sorghum are priced at USD 450 per metric ton, while soybeans are priced at USD 490-500 per metric ton, with long-grain rice at USD 420 per metric ton.

Wheat Demand Increasing in Indonesia

An interesting trend on the demand side is the rising global demand for wheat. This is mainly due to increases in imports by third-largest importer Turkey and second-biggest importer Indonesia. Indonesian imports, in particular, are expected to rise to approximately 11.3 million tons during 2019/2020 from 10.78 million tons in 2018/2019. Indonesian demand for wheat has been rising steadily over the past decade, contributing to increases in worldwide imports as the country’s necessary consumption volume of 11K tons of wheat flour cannot be sourced domestically but is entirely reliant on imports.

While the coronavirus outbreak has made import situations unpredictable, traders have seen an even bigger increase in wheat demand as customers have been stockpiling instant noodles in major provinces such as Jakarta, East Java, and West Java following a nation-wide lockdown. The continuous demand increase could be an opportunity for non-traditional export markets, such as South Africa, to tap into the growing Indonesian wheat market. Safse Development Agency has the capacity to export 4.5K metric tons of South African wheat priced at USD 250 per metric ton per month.

Exports to Continue Amid the Coronavirus Outbreak

Despite the coronavirus making trading more difficult, the coronavirus has not greatly affected exports, states Safse Development Agency, and it expects to meet their 400-450K metric ton annual average in exports. The company accommodates orders of different quantities convenient for the buyer, usually in quantities of 25Kg or 50K packaged bags, and provides various certifications such as a commercial invoice, bill of lading, certificate of quality, quantity, weight, origin, as well as an insurance policy form (CIF prices).

Safse Development Agency is currently offering customers a 3% discount benefit for clients who make an order of over 200 metric tons per order and a 2% payment discount for customers who order and commit to payment within 15 days after receiving a sample. Seabound shipments are also welcomed, delivered to all parts of the world from Asia to the Americas. The company is planning to continue expanding its customer base to include a variety of international customers in the forthcoming years.