South Africans might find filling their food baskets a tough task in coming months as the prices of household staples – including maize meal‚ meat‚ eggs and dairy products – are set to rise.
The warning comes from agriculture players‚ whose industry has been beset by a drought that has devastated output and raised the need for imports.
The sector entered a recession in the second quarter of this year because of drought‚ while those in the industry were little shocked by the 17.4% contraction it experienced in the period.
South African fruit and meat exports – especially ostrich – have also come under pressure because of weak demand in key traditional markets and suffered bans following quality control concerns.
The rand has been battered on the markets and trading at record lows in recent weeks‚ making imports both unattractive and expensive. Food inflation has also been on an upward trajectory.
On Wednesday the crop estimates committee slightly raised this year’s maize output forecast to 9838 million tons‚ but Grain SA projected the country needed to import about 750000 tons.
AgriSA senior economist Thabi Nkosi said: “We have seen a steady increase in food prices and the weak rand means we will still have to bring food in at a high cost.”
There is already evidence pointing to food prices picking up – after slowing down for 10 consecutive months‚ food inflation experienced a marginal increase last month.
Although consumers may not yet feel the pinch of the developments at retail level‚ those on the production side of the food chain have seen drastic hikes in raw crops‚ Grain SA economist Wandile Sihlobo said.
“It takes about four months for maize price increases to trickle down to maize meal and samp‚” he said.
The price lag for poultry‚ meat and dairy products is slightly longer and could materialise in the next six months‚ he said.
Lags occur because of the time it takes farmers to produce maize and the production process it undergoes before it hits shelves.
A similar phenomenon happens with meat and poultry‚ which is associated with the time it takes to rear the animals for slaughter and packaging.
Statistics SA attributed the sector’s decline to a drop in the production of field crops including maize‚ sunflower and sugar cane‚ as well as horticultural products such as citrus subtropical fruit.
The sector would remain in the doldrums if the drought persisted‚ Nkosi said.
There is more pain on the horizon for the sector‚ whose production costs economists estimate will be hard hit by the limping rand.
“South Africa imports around 70% fertiliser and about 98% agro-chemicals,” Sihlobo said.
SA Ostrich Business Chamber chief executive Piet Kleyn said on Wednesday they were elated the ban on their product had been lifted and they could export to Switzerland‚ Germany‚ France and the UK.
The decreasing fuel price may be a boon for consumers and producers facing rising interest rates and inflation as well as electricity price hikes. It dropped 51c/l this month and is expected to fall by about 70c/l next month.
The drop could have been R1 had it not been for the weak rand‚ independent economist Dawie Roodt said.
Consumers face price hikes for staple foods
The warning comes from agriculture players‚ whose industry has been beset by a drought that has devastated output and raised the need for imports.
The sector entered a recession in the second quarter of this year because of drought‚ while those in the industry were little shocked by the 17.4% contraction it experienced in the period.
South African fruit and meat exports – especially ostrich – have also come under pressure because of weak demand in key traditional markets and suffered bans following quality control concerns.
The rand has been battered on the markets and trading at record lows in recent weeks‚ making imports both unattractive and expensive. Food inflation has also been on an upward trajectory.
On Wednesday the crop estimates committee slightly raised this year’s maize output forecast to 9838 million tons‚ but Grain SA projected the country needed to import about 750000 tons.
AgriSA senior economist Thabi Nkosi said: “We have seen a steady increase in food prices and the weak rand means we will still have to bring food in at a high cost.”
There is already evidence pointing to food prices picking up – after slowing down for 10 consecutive months‚ food inflation experienced a marginal increase last month.
Although consumers may not yet feel the pinch of the developments at retail level‚ those on the production side of the food chain have seen drastic hikes in raw crops‚ Grain SA economist Wandile Sihlobo said.
“It takes about four months for maize price increases to trickle down to maize meal and samp‚” he said.
The price lag for poultry‚ meat and dairy products is slightly longer and could materialise in the next six months‚ he said.
Lags occur because of the time it takes farmers to produce maize and the production process it undergoes before it hits shelves.
A similar phenomenon happens with meat and poultry‚ which is associated with the time it takes to rear the animals for slaughter and packaging.
Statistics SA attributed the sector’s decline to a drop in the production of field crops including maize‚ sunflower and sugar cane‚ as well as horticultural products such as citrus subtropical fruit.
The sector would remain in the doldrums if the drought persisted‚ Nkosi said.
There is more pain on the horizon for the sector‚ whose production costs economists estimate will be hard hit by the limping rand.
“South Africa imports around 70% fertiliser and about 98% agro-chemicals,” Sihlobo said.
SA Ostrich Business Chamber chief executive Piet Kleyn said on Wednesday they were elated the ban on their product had been lifted and they could export to Switzerland‚ Germany‚ France and the UK.
The decreasing fuel price may be a boon for consumers and producers facing rising interest rates and inflation as well as electricity price hikes. It dropped 51c/l this month and is expected to fall by about 70c/l next month.
The drop could have been R1 had it not been for the weak rand‚ independent economist Dawie Roodt said.
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