Economics

Road freight begun along the N3, but the agricultural sector has already lost significant revenue

Following the unrest in Kwa-Zulu Natal and Gauteng, basis food supply such as bread have become increasingly difficult attain with some consumers from small towns in KZN having to travel for three hours town to Eastern Cape to buy some fundamental items to survive.

Queues are over a kilometre to enter into some stores in Durban with consumers to only buy one item per-person. At this point it’s not clear when will things get back to normal because South Africa have enough food, hence panic buying is not necessary. The Minister of Agriculture Ms Thoko Didiza reiterated this on her statement on the 15 th of July. However, the issue is when and how food will be available in areas mostly affected.

On the 14 th of July, the COE on for the Road Freight Association stated that about 30 trucks have been burnt in South Africa with N3 between KZN and Gauteng as the hot spots. As a result, trucks were stopped due to fears which resulted to food supply destructions. This is where the problem lies pertaining to food supply and goods meant for exports via the Durban port. Midweek, truck traffic on N3 between KZN and Gauteng was estimated 80% lower than usual which is key road to transport goods between the two provinces. From Gauteng’s point of view food supply might not be as affected as KZN given the scale of destruction between the two provinces, however, for goods exported via the Durban port such as grains of which we are currently few weeks for this marketing season are transported through N3, citrus products of which significant quantities come from Limpopo pass through the same route. Harvesting is progressing well meaning these products must reach the market in time given their time span on the way to market as they are perishable.

Farmers had to throw away thousands liters of milk in KZN which is very costly given the milk industry cost of production because they couldn’t deliver their produce to the market.

The Marine Traffic has reported more than 50 vessels in the Durban port of which crude oil vessels account for more, and traffic expected to rise. While Cleaning has begun in some areas and operations has partly resumed in some parts along N3, the agricultural industry has lost significant earnings both domestically and in exports due to disturbances especially along N3. Moreover, South African Petroleum Refinery in Durban is still closed following the risk imposed by the unrests and this might add more pressure in transportation when things normalise. Fuel shortages have already been reported in some areas in KZN.

While supply chains are very efficient in South Africa, the industry has took a nock during the past few days and some agribusinesses are likely to struggle for some time after this, especial the emerging ones as millions were lost in products and infrastructure during the unrests.

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