Russia-Ukraine War driving up food and input costs but supporting South African farmers
Research organisation the Bureau for Food and Agricultural Policy (BFAP) has warned that the Russo-Ukrainian War could drive up food costs around the world, including in South Africa, both directly and indirectly. On the other hand, it will provide price support for South African agriculture in the short term.
The agency had already, in its food inflation report for February, warned of the war directly causing such price increases, because of the important role of both combatant countries in global food production. Ukraine was the world’s number four maize exporter, with an about 15% share of global exports, and Russia was a top exporter of wheat, whose share of global exports was some 20%. The two countries also ranked in the top ten of sunflower seed exporters.
But the conflict also threatened to drive up input costs for South African farmers. “Higher grain prices also drive up animal feed costs and the prices of products such as fertiliser, of which South Africa is a net importer, have already increased sharply,” pointed out BFAP. “Russia is a major exporter of oil, gas and fertiliser – all of which will drive production costs higher in 2022.”
However, the effect of the war on agricultural prices is not yet clear. “While there is still some time before [northern] winter crops are harvested and spring crops planted, an extended period of conflict has the potential to prolong the short term price response that is already evident,” observed the bureau. The conflict could create “significant risk for food supply chains”.
In addition, there are the effects of the severe and enduring drought in South America. This has led to Brazil’s soybean crop being 9% lower than was estimated in January. In turn, this is supporting most oilseed prices and also, to a degree, the prices of grains.
Despite the cost increases driven by these international factors, the stronger prices resulting from the same factors are set to drive a third expansion in South African agricultural gross domestic product in a row, concluded BFAP.
Comments
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation