Mzansi Agriculture Talk

Agriculture

COVID-19: Staple food prices expected to parachute

All eyes will be on the South African Grain Information Service (SAGIS) this week. It is expected to release its weekly grain producer deliveries data for the week of 03 April 2020.

Speculations were rife that South African silos might be running low on maize and wheat stockpiles (South Africa’s main staple food).

However, Grain SA said it was in continuous contact with input suppliers on the availability of inputs in South Africa. 

“Input service providers are in agreement that with good planning, no shortages of inputs are foreseen. There are some agricultural chemicals that may be undersupplied due to international shortages, but alternative products are available,” Grain SA said in a statement.

The Agricultural Business Chamber (AgBIZ) monthly market review noted that during the week of 20 March 2020, about 2 717 tonnes of wheat were delivered to commercial silos.

“This placed total wheat deliveries at about 1.4 tonnes, which equates to 96% of the expected harvest in the 2019/20 season. There are still very small volumes delivered thus far in the oilseeds (soybeans and sunflower seed), both still at levels below 20 000 tonnes,” said Wandile Sihlobo, chief economist at AgBIZ.

With the 10% depreciation of the ZAR/USD exchange rate, the Bureau for Food and Agricultural Policy (BFAP) expected an increase in consumer food inflation.

“Maize meal prices, in turn, are also expected to increase over the coming months. Average white maize prices increased by 22%, in absolute terms, between 2 March and 2 April 2020, and this is expected to result in maize meal price increases of around 12% over the next four months” it said.

According to Sihlobo, in the week of 27 March 2020, South Africa’s 2019/20 season amounted to 740 044 tonnes, which equates to 41% of the seasonal import forecast.

Similarly, wheat prices increased by 11% between 2 March and 2 April 2020, with further increases expected.

BFAP further found that the outbreak of the COVID-19 pandemic will lead to more households relying on food coping strategies to ‘mitigate household income pressure.’

“Gauteng indicates that the dominant strategies of households across the socioeconomic spectrum involved switching to more affordable retailers, buying more affordable food, buying more ‘no-name brand’ food, and decreasing dietary diversity.”

COVID-19: Staple food prices expected to parachute
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