Food price hike likely in KZN, says agricultural economist
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Durban - KwaZulu-Natal is most likely to see a short-term price increase in food prices post looting because of supply and demand issues.
This is according to FNB agricultural economist Dawie Maree. He said there won't be a long-term effect on the food hike.
Now that the dust has settled in Gauteng and KwaZulu-Natal, concerns have been raised about food supply, how the looting affected supply chain and whether food hikes can be expected.
Maree said the economic sector was not affected that much in terms of direct impact of the looting. He notes that cold storage places were looted but says it was to a smaller extent to the retail sector. “The indirect impact is much bigger. We deal with biological assets, for example, with the dairy industry one cannot close the tap of a cow and say it must stop producing milk. Those productions continue and we saw isolated cases where milk was dumped. In general, that was addressed very quickly as some milk was transported up to Gauteng and processed for distribution.”
The challenge now with the ports still being closed due to the Transnet hacking exacerbates the problem a bit, said Maree.
On food inflation, he explained that with limited supply and limited availability, prices will increase.
“The demand is higher, however I think this will be addressed fairly quickly as the supply chains are recovering and food is being transported through the distribution centres in other provinces down to KZN. I don’t foresee a long-term effect on food price inflation. This will of course have an impact on the consumer.
“The options of where you can buy as a consumer will be limited because the looted buildings will have to be repaired and declared safe,” explained Maree.
Reports suggest that neighbouring countries like Zambia, Zimbabwe and Botswana also felt the punch of the looting due to the export factor. Based on this, Maree said both countries rely on Durban as a port of entry for their imports and exports.
“The closing of the fuel refineries has an impact on availability because all those petroleum products that’s being refined in South Africa go out to our neighbouring countries. Fortunately, we haven’t seen a long-term impact on that.”
On the issue of disaster relief, Southern African Agri Initiative (SAAI) chairman Theo de Jager is of the opinion that government is not doing much to assist the sector. “While the state is establishing committees and convening meetings with willing organisations to plan disaster relief, thousands of tons of supplies already are being moved every day outside the framework of the state on trucks, by air and on bakkies to alleviate suffering in towns and cities. Private security guards escort convoys where the SAPS and the defence force are unable to do it.”
De Jager said the agriculture sector is being put on the back-burner, as had also been the case when Covid-19 hit the country. “The Minister of Agriculture, Thoko Didiza, initially together with some agricultural organisations established a number of committees to co-ordinate the impact of Covid-19 regulations on the agricultural sector, but the announcement was the last the public heard about it.
“With the unrest in KwaZulu-Natal the same agricultural organisations again were involved, even with announcements in the media. There are three solid reasons why the much larger disaster relief movement functioning outside the state is not and does not want to be involved in this.”
He said the three reasons include corruption, self-enrichment and ineffectiveness “that come with the package when the state becomes your partner”.