The Covid-19 restrictions currently up for public comment under the proposed health regulations will not move the needle on South Africa’s economic growth, says beef products producer Beefmaster Group.
Roelie van Reenen, the supply chain executive at Beefmaster Group, has said in an interview that the government wants to permanently enact Covid-19 measures into the health regulations, which will hamper the economy.
The World Bank this month warned that South Africa’s economic growth could decline by 2.8 percentage points in 2022 from an estimated 4.9 percent recorded in 2021.
The public comment for the Draft Health Regulations will close this Sunday.
“In a climate with escalating fuel and food prices, staggering inflation and increasing interest rates, we need more levers we can pull to get our economy going again and the current regulations, as well as those proposed, are not going to achieve this,” he said.
He has said an example of the current restrictions inhibiting the economy, is the hosting of large scale events, as capacity is still severely restricted with all gatherings only permitted at 50 percent of the venue capacity.
Important industry gatherings – without restrictions – are necessary to stimulate and ensure a thriving economy and agricultural sector.
Van Reenen has said in pre-pandemic times agricultural players would have gathered at events like Nampo, which is the biggest agricultural show in the Southern hemisphere, to cement new business deals and existing relationships. These events were excellent revenue generators and vital promotion platforms for the sector, which fell away during Covid-19.
He says stadiums are another good example, as fully functional stadiums cost less per seat to operate, create more jobs, and allow money to be spent and circulated back into the economy. The South African economy needs events and stadiums to be opened to full capacity.
Another major concern for Van Reenen was that 32 land borders, which were closed under the state of disaster regulations to limit the spread of Covid-19, would remain closed under the latest raft of regulations announced earlier this month.
“This is limiting trade between our neighbours and other African countries and making it difficult to find alternative routes for the import and export of goods. We want to see these borders opened to stimulate trade again,” Van Reenen said.
This is even more necessary considering the severe strain on the shipping industry due to global supply chain backlogs, which is now only going to be more adversely affected given the uncertainty of the services of Durban harbour, after recent severe floods.
All of the measures that are still in play will only mean that the over-stretched consumer will end up paying more for goods and services, and that the poor will bear the brunt of these economic burdens.
Van Reenen has said that, as abruptly as the Act has been instated, so too many of the measures that are still in place should be abolished, as these limit not only industry’s ability to progress, but put great strain on the pockets of consumers. “The time has now come to take drastic steps,” Van Reenen said.
Meanwhile, the Absa Agri Trends: Livestock Report released earlier this month, has said last month, class A beef prices have reached highs of R58.60 per kg in the third week. This eased slightly towards the end of the month. Class C prices, in turn, have continued on their downward trajectory apparent since January.
The report says prices are supported by ongoing limited supply. It is, however, expected that the effect of economic pressures will weigh on demand and limit the scope for dramatic price increases over the coming months.
The report forecast beef prices to trend marginally downward due to demand pressures associated with the increased cost of living. The magnitude of the decrease is, however, expected to be limited due to the substantial rise in input costs. Weaner calf prices are also trending lower due to seasonal effects associated with increased availability. High feed prices could also weigh on weaner calf demand.
Agricultural Business Chamber(Agbiz) chief economist Wandile Sihlobo recently said the one essential product whose price trend remained uncertain was meat.
“The recent outbreak of foot-and-mouth disease will likely lead to the temporary closure of some key export markets for the red meat industry, thus adding downward pressure on prices. Conversely, there are fears of a potential increase in poultry product prices, which could somewhat lessen the benefit of softer red meat prices,” Sihlobo said.
The Department of Agriculture, Land Reform and Rural Development Minister Thoko Didiza has recently announced that the country is currently battling 56 outbreak cases of the foot-and-mouth disease (FMD), involving farms and communal areas in the Free State, KwaZulu-Natal, Limpopo, North West and Gauteng.
The March 2022 FMD outbreak has resulted in China suspending imports from South Africa of all cloven-hoofed animal goods, including wool, beef and other red meat products. These exports are said to be contributing billions to the local economy.
BUSINESS REPORT