Food prices are rising world-wide, and South Africa cannot escape the impact. With both local and international indicators pointing upwards, the impact on poor communities is going to worsen in months to come.
Local food prices are already rising, according to a number of monitors. The Bureau for Agricultural Policy (BFAP) reported last month that food inflation in South Africa was higher than expected, at 6.6%. Fuel and electricity prices are at record highs, impacting production and distribution costs. Even a delay in paying out for the July riot damage to rebuild cold food storage facilities is cited as one of the reasons.
International food prices are also rising sharply. The United Nations Food and Agricultural Organisation (FAO) says prices have gone up 30% this year, the highest rise in a decade.
The causes are varied. As we noted last month, there’s a chain reaction in agricultural inputs – an energy crisis pushes up fertiliser costs, which push up grain prices, which affect meat and poultry producers.
But other factors are moving prices upwards too. They range from bad weather – floods or drought – freight costs, supply chain delays and labour shortages, to changes in demand in major markets like China.
It’s both global and local. Although there is a renewed focus on localised food systems – an aspect highlighted in FairPlay’s food security webinar – many of the causes are beyond the control of South Africa’s farmers and food producers.
As the situation worsens, chicken importers are likely to bleat about the likely effect of tariffs on food prices. A senior agricultural economist has noted that they have yet to prove that assertion. More to the point, importers have yet to reconcile their professed concern for consumers with the fact that low import prices are not passed on the buying public.
Food inflation, food security and the impact on poor households are going to be in the headlines for months to come. Perhaps an enterprising journalist will look at the fat profits made from the R30 billion worth of chicken imports over the past five years.
