Johannesburg - If South Africa has any hopes of curbing high food prices, a logistics infrastructure strategy implemented with the utmost urgency will go a long way in alleviating pressure on consumers, according to an agricultural economic expert.
Senior agricultural economist at FNB, Paul Makube, said no single solution would resolve the problem of high food prices as the indigent had limited access to food, especially in an environment of slow economic growth and rampant unemployment.
Makube said while governments globally were bound to respond to high food price pressures and devise interventions in line with what policy could permit, finding a solution in the South African context was more complicated.
In that, he said, South Africa was operating in an open global market where developments elsewhere, such as droughts, floods and trade restrictions, had a huge influence on price direction in the local market.
One such instance he referred to was the outbreak of the Russia-Ukraine war, which interrupted markets and caused a surge in agricultural commodity prices early in 2022.
This was, however, curtailed by the implementation of the Black Sea Grain Initiative Deal, which ensured the safe passage of agricultural cargo from Ukraine to the world market.
As the war had affected commodities such as fertiliser, wheat, maize and sunflower exports, countries that were significant world exporters of these commodities were affected.
Makube said, however, that following the implementation of the deal, commodity prices started easing and fell sharply this year, as measured by the United Nations Food and Agriculture Organisation.
In contrast, Makube said South Africa’s food inflation remained sticky on the upside for the better part of this year before easing from a double-digit high.
If that wasn’t enough, other cost pressures emanated from poor and dilapidated road infrastructure, which caused damage to vehicles, delivery delays and long distances covered as drivers sought better alternative routes to markets, he explained.
More than anything, he said that as long as performance at agriculture levels remained solid, a logistics infrastructure strategy would go a long way to easing things for consumers.