Red flags for food security in South Africa

The latest warning about the fragility of South Africa’s food security comes from consultancy PwC, which noted that the country’s food supply chain is under immense pressure, largely due to the extended power cuts that have plagued business and agriculture.

BusinessTech says that PwC’s latest Economic Outlook report raises “red flags for food security and pricing in South Africa”.

PwC said that the adverse impacts of rolling blackouts are being felt particularly hard in agriculture. It cites the poultry industry as an example, because farmers are struggling to access enough electricity to achieve optimal output.

The group cited the Global Food Security Index 2022 which ranked South Africa 52nd out of 113 countries for the availability of food. PwC said that if things were to continue as they are, the country’s ranking could be negatively affected.

Farmers are not the only ones feeling the pain of load shedding; retailers at the other end of the value chain are spending billions on diesel generators to keep fridges cool. For example, major retailer Pick n Pay has spent R522 million over the course of last financial year, and Spar racked up a bill of R700 million on diesel in just six months.

“This, in turn, diverts their investment spending away from, e.g. opening new outlets. Some components of the food value chain are also experiencing a decline in water availability due to the (often interrupted) power needs of such systems,” reported PwC.

The local food value chain is being disrupted in both supply and cost.

PwC said that the real risk is that retailers are not able to consistently source food supplies to supply communities at affordable prices. Increases in food price inflation were therefore not surprising, it said.