South Africa sees food inflation, opportunity from Russia-Ukraine war

A shopper wearing a face mask looks at grocery items, amid the spread of the coronavirus disease (COVID-19) at Mall of the south, in Johannesburg, South Africa, June 17, 2020. REUTERS/Siphiwe Sibeko

Register now for FREE unlimited access to Reuters.com

register

  • SA eyes maize export markets for bumper crop
  • No wheat imported from Russia and Ukraine this year

March 8 (Reuters) – South Africa will feel the impact of the Russia-Ukraine conflict on food prices but is also primed to benefit from it through maize exports, experts said on Tuesday.

Commodity prices, including wheat and corn, have surged since Russia began its invasion of Ukraine on Feb. 24. Russia and Ukraine account for about 29% and 19% of global wheat and maize exports, respectively.

With Ukraine’s ports closed and much of the Russian grain supply frozen by Western sanctions, there are fears of tightening supplies will lead to shortages in importing countries.

Register now for FREE unlimited access to Reuters.com

register

South Africa, a net exporter of maize, another name for corn, imports about 40% of its wheat, but Agriculture Business Chamber Chief Economist Wandile Sihlobo said shortages were unlikely.

“In South Africa, the near-term impact of this war is through price transmission and not the limitation on the commodities’ availability,” Sihlobo said in a weekly note.

Last year, the country harvested 16,315 million tonnes of maize, its second-biggest crop on record. Official data released last week forecasts an 11% decline in output this year, but the projected 14,528 million tonnes is still in excess of domestic consumption.

For wheat, data from Grain SA shows South Africa had imported 40% of its import requirements by Feb. 25 and none of it came from Russia or Ukraine.

South Africa imported wheat from Lithuania, Argentina, Poland, Australia, Latvia and the United States.

“The conflict has an impact on the international wheat prices which ultimately reflects in the SA wheat prices as well,” Grain SA economist Luan van der Walt told Reuters in an emailed response.

He said South Africa could benefit from maize exports if supplies from Ukraine remain curtailed.

“In many cases, SA has to compete with especially Ukraine in terms of maize exports. Therefore, it could present even more maize export opportunities for SA,” van der Walt said.

Register now for FREE unlimited access to Reuters.com

register

Reporting by Nelson Banya; Editing by Christian Schmollinger

Our Standards: The Thomson Reuters Trust Principles.

Comments are closed.