Staple food prices have started to soar as the South African maize crop wilts under the worst drought in 22 years.Bread, which rose in price by more than a rand over 12 months last year to R7.99, could cost R1 more (R8.99) a loaf in the next few weeks, a leading Eastern Cape retailer predicted yesterday.
South Africa’s rainfall has dropped because of an exacerbated El Niño weather effect caused by warming of the Pacific ocean.
Grain SA economist and researcher Petru Fourie said the price of white maize meal was expected to rise 30% in the coming months, which in addition to last year’s 20% increase, meant a 50% price increase.
Nigel Connellan, managing director of Western Gruppe Trading, which runs 13 Spars in East London and Gonubie said maize product suppliers had hit them with an immediate 15% to 20% increase in the first days of January.
He said:
lWhite Star maize meal, one of the biggest sellers in the Eastern Cape, would increase in price by 20% on February 1, and Tiger Brands and Premier maize products would rise eight to 10% on January 18; and
lSugar giant Huletts would increase the price of its sugar by 14% on February 3.
“There is also a problem with availability.
“Suppliers just don’t have enough.”
More increases were expected depending on the worsening of the drought, the rand-dollar exchange rate and the higher price of imported maize. Data from the Water and Sanitation Department shows that South African dams are at only 57%‚ compared with 82% a year ago.
Instead of exporting South African maize to neighbouring states, Grain SA is warning that five million tons will have to be imported to feed South Africans, probably from South and North America.
Fourie said Grain SA met Transnet late last year to talk about how to manage the massive maize import.
The largest previous import was in 2007 and was five times smaller at 1.1-million tons. “We have never had to handle such a large amount.
“We are definitely concerned about the infrastructure,” she said.
There has also been a 120% increase in the price of yellow maize from January 2014-15.
Yellow maize is used to feed cattle and poultry.
“This will impact on the entire economy from producers to consumers.
“Producers face significant financial losses,” said Fourie.
Border-Kei Chamber of Commerce director Les Holbrook said prices were already steadily increasing.
Holbrook said the country was already importing maize and wheat at higher prices.
“With the rand-dollar price factored in, we will see higher than previous prices,” he said
Stutterheim maize farmer Patsy Schenk, of Innesfree farm in the Amatole mountains, thanked God for the little rain they had yesterday because they had invested R4.3-million in improving their 270-hectare mielie crop.
“We are not sure if we will reap anything this year. We are likely to make a loss. We are very much in God’s hands.”
Bernard Burger, who farms on Undula outside Stutterheim said the drought in the north was “on its way”.
Burger said: “I planted seed but they never germinated. We have had absolutely no rain.”
A record R15-billion to R20-billion could be needed to offset the disaster, Agri SA executive director Omri van Zyl reportedly said. — mikel@dispatch.co.za
Food prices increase as crops fail
Bread, which rose in price by more than a rand over 12 months last year to R7.99, could cost R1 more (R8.99) a loaf in the next few weeks, a leading Eastern Cape retailer predicted yesterday.
South Africa’s rainfall has dropped because of an exacerbated El Niño weather effect caused by warming of the Pacific ocean.
Grain SA economist and researcher Petru Fourie said the price of white maize meal was expected to rise 30% in the coming months, which in addition to last year’s 20% increase, meant a 50% price increase.
Nigel Connellan, managing director of Western Gruppe Trading, which runs 13 Spars in East London and Gonubie said maize product suppliers had hit them with an immediate 15% to 20% increase in the first days of January.
He said:
lWhite Star maize meal, one of the biggest sellers in the Eastern Cape, would increase in price by 20% on February 1, and Tiger Brands and Premier maize products would rise eight to 10% on January 18; and
lSugar giant Huletts would increase the price of its sugar by 14% on February 3.
“There is also a problem with availability.
“Suppliers just don’t have enough.”
More increases were expected depending on the worsening of the drought, the rand-dollar exchange rate and the higher price of imported maize. Data from the Water and Sanitation Department shows that South African dams are at only 57%‚ compared with 82% a year ago.
Instead of exporting South African maize to neighbouring states, Grain SA is warning that five million tons will have to be imported to feed South Africans, probably from South and North America.
Fourie said Grain SA met Transnet late last year to talk about how to manage the massive maize import.
The largest previous import was in 2007 and was five times smaller at 1.1-million tons. “We have never had to handle such a large amount.
“We are definitely concerned about the infrastructure,” she said.
There has also been a 120% increase in the price of yellow maize from January 2014-15.
Yellow maize is used to feed cattle and poultry.
“This will impact on the entire economy from producers to consumers.
“Producers face significant financial losses,” said Fourie.
Border-Kei Chamber of Commerce director Les Holbrook said prices were already steadily increasing.
Holbrook said the country was already importing maize and wheat at higher prices.
“With the rand-dollar price factored in, we will see higher than previous prices,” he said
Stutterheim maize farmer Patsy Schenk, of Innesfree farm in the Amatole mountains, thanked God for the little rain they had yesterday because they had invested R4.3-million in improving their 270-hectare mielie crop.
“We are not sure if we will reap anything this year. We are likely to make a loss. We are very much in God’s hands.”
Bernard Burger, who farms on Undula outside Stutterheim said the drought in the north was “on its way”.
Burger said: “I planted seed but they never germinated. We have had absolutely no rain.”
A record R15-billion to R20-billion could be needed to offset the disaster, Agri SA executive director Omri van Zyl reportedly said. — mikel@dispatch.co.za
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