Food prices to rocket, farmers warn
As the Black Friday euphoria disappears, South African consumers are about to be hit by high food prices this festive season because of the lingering effects of drought, Agri SA warned.
It said things would get tougher due to the recent drought that hit large parts of the country and affected food production in provinces such as the Eastern Cape, Western Cape and Northern Cape.
Christo van der Rheede, deputy executive director at Agri SA, said, “No one wants to see consumers suffering at the end of the day but there are certain factors like the avian flu, the drought, increases in petrol and diesel prices and also the increases that Eskom is proposing.
"All of these things impact on the farmer’s ability to farm profitably.
“We just hope and pray that your big retailers take into consideration the challenges that farmers face.
"And the challenges the consumers will ultimately face if we do not control food inflation,” he said.
He said meat prices had already increased as a result of the drought as lots of farmers lost livestock, particularly in the Eastern Cape where cattle and sheep were severely affected.
The sudden cold weather recently exacerbated the situation with snow in many areas resulting in many sheep dying.
“We estimate that about 5 000 sheep alone got killed during that very cold weather.
"And together with the number of sheep and the cattle that died as a result of the drought, obviously, that would cause a shortage on the market. You will see an increase in prices as well,” Van der Rheede said.
Already, South Africa has witnessed an average increase in meat prices of 15.5%, while milk, cheese and eggs increased by 2.7%, the last also attributed to avian flu.
Drought in the Western Cape has also affected wine prices by 7.2%.
However, grain products such as bread will become a little bit cheaper due to the surplus of maize, and some fruit-producing provinces such as Mpumalanga, Limpopo and KwaZulu-Natal will also have lower prices.
Van der Rheede said the Land Bank might have to step in and assist some farmers through loans to mitigate the situation.
“Farmers produce food through production loans.
"You can have all the land in the world but if you do not have production loans to buy feed, tractor and diesel then the land means absolutely nothing,” he explained, adding that the current debt of farmers in the country was standing at R160-billion, which should be paid back.
He called on the government not to impose unnecessary burdens on farmers.
Hamlet Hlomendlini, chief economist at Agri SA, said the livestock industry would take between three to five years to recover from drought which meant that farmers have to cut down significantly on slaughtering.
“Farmers are building their herds because they have to recover.
"So, it means if there is no slaughtering, the supply of meat in South African is much less.
"If the supply of meat is less, the demand by consumers wanting more meat is more. So we got less supply and great demand.
"That pushes up the prices of meat. That is what is happening at the moment,” Hlomendlini said.
He said that in the poultry industry, the situation was worsened by imports that were not cheap, resulting in meat inflation remaining high for the consumer.
He said businesses were not doing well also due to uncertainty with the rand and the possibility of downgrades by the ratings agencies.
“You are going to see consumers having to pay a lot for food and fuel,” Hlomendlini said.