As food prices in South Africa continue to skyrocket, local consumers may soon feel more pain while grocery shopping as the price of rice could be increasing soon.
This comes after a Thai government official told Reuters that Thailand and Vietnam are in talks on a pact to raise the price of their rice exports to increase their leverage in the global market and improve farmer incomes.
About 95 % of South Africa's rice is imported from Thailand (71 %) and India (23.4 %).
According to data, imports in 2020 showed that South Africa imported $506 million (R7.84 billion) in rice, becoming the 13th largest importer of rice in the world.
At the same time that year, rice was the 15th most imported product in the country.
Reuters further reported that agriculture officials from Thailand and Vietnam, the world’s second and third biggest rice exporters, met in Bangkok on Friday to discuss joint measures to support their farmers and rice industries and manage growing production costs.
“We aim to raise rice prices, increase farmer income and increase bargaining power in the global market,” Thai government spokesperson Thanakorn Wangboonkongchana said in a statement after discussions on the sidelines of a farms expo.
“The rice price has been low for more than 20 years while the cost of production has been increasing.”
Vietnam and Thailand account for roughly 10% of global production of rough rice, and about 26% of global exports, according to the U.S. Department of Agriculture.
So far in 2022, Thai export prices for 5% broken rice have averaged about $420 a tonne, or 16% more than India’s average of $363.
Increasing food prices
Just last week, Tiger Brands, the largest food product manufacturer on the continent, warned that “significant double digit price increases” are inevitable across the majority of its food and household products.
The group, which owns iconic South African food brands such as Koo, Fattis and Monis, Jungle Oats, Enterprise, All Gold, Purity, Oros, and Tastic Rice, said that its profit margins had been crunched in the six months to March 31 as cost saving initiatives were not in time, or enough, to counter “unprecedented” rising input prices from the global supply chain squeeze, chief financial officer Deepa Sita told Business Report during a telephone interview.
“It’s not looking good for consumers,” she said.
She said people who had worked at Tiger for decades had never seen this kind of rapid increase in input costs. Prices for raw food materials, for example, such as wheat and maize, had increased between 20-40 percent in the six months.
Reuters/ BUSINESS REPORT ONLINE