Ukraine conflict impacts SA agriculture

In addition to raising fuel and wheat prices, Russia’s invasion of Ukraine is going to have an immediate impact on South African agriculture because of the sizeable exports to both countries. The trade embargo on Russia and war in Ukraine could bring most of that to a halt.

Some details were provided by the Western Cape agriculture minister Ivan Meyer. He said South Africa’ agricultural exports to Russia and Ukraine combined came to R4.1 billion in 2020. Horticultural products – oranges, pears, apples, mandarins, lemons, fresh grapes and wine – contributed R3.4 billion of that, with 88% coming from the Western Cape. South Africa exported 6.9 million litres of wine to Russia and about 300 000 litres to Ukraine last year.

Russia and Ukraine account for nearly 30% of global wheat exports. Meyer said South Africa had imported R2.3 billion worth of wheat and meslin – a mixture of wheat and rye – in 2020 and that bread price increases would affect food security and the poor.

Disruptions and security concerns had already resulted in a 50% increase in the price of wheat.

Meyer also said the conflict could affect agricultural supply chains, as well as product storage costs and the quality of produce. The costs of primary agricultural inputs are up by 100% in South Africa compared to January last year.

The agricultural industry is facing the challenges of disrupted logistics, financial losses and the diversion of fruit exports to other markers. For example, ports in Rotterdam, Antwerp and Bremerhaven are congested due to time-consuming scans of containers for explosives.

A 23-day journey of fruit from Cape Town to St Petersburg could now take up to 93 days due to various diversions.

If all southern hemisphere countries diverted fruit to the same markets, it could result in oversupply and lower prices. The Western Cape government is looking for ways to support producers in the short to medium term.