Posted on March, 9, 2022 at 09:13 am
THE RUSSIA-Ukraine war has led to significant upside risks to food price inflation, according to the Agricultural Business Chamber (Agbiz).
Wandile Sihlobo, the chamber’s chief economist, said yesterday that Russia and Ukraine account for nearly 30 percent of global wheat exports, about 14 percent of global maize exports, roughly 32 percent of global barley exports, almost 60 percent of global sunflower oil exports and about 14 percent of global fertiliser exports.
“With various shipping lines avoiding the Black Sea region, and the extensive sanctions that Western countries have imposed on Moscow – including the agreement to exclude some Russian banks from some global payment systems, such as SWIFT – there is anxiety in global agricultural markets that the risks of food insecurity are now elevated. This is particularly the case as the war occurred when global agricultural, and input prices such as fertilisers, were already elevated, up by double-digits from the previous year,” Sihlobo said.
The inescapable impact of the military operation on South African consumers would be through prices. The rise in agricultural commodity prices, domestically and globally, along with rising fuel costs, presented significant upside risks to food price inflation
“We had initially thought [that] in 2022, South Africa's food price inflation would average between four to five percent (compared with 6.5 percent in 2021). However, we now see more upside risks to these numbers. When we made these estimates, the war was not on our radar, even though the global food prices were already relatively high.
Source: IOL