Weak rand, drought send South African food prices higher
The drought and rapid depreciation of the rand have led to a rise in food prices, hitting the poorest South Africans hard, Western Cape Economic Opportunities Minister Alan Winde said on Friday.
Delivering the opening address at the launch of the latest yearly baseline produced by the Bureau for Food and Agricultural Policy (BFAP), he said that, in 2015, there was a 15% drop in food production in the Western Cape and in Limpopo owing to the drought.
“In terms of livestock, there has been a 15% reduction in the national herd. There’s been increased slaughtering during the drought and this will continue to impact production for the next three to four years,” Winde noted.
The BFAP baseline offers insight into key trends in areas including production, consumption, trade, food prices and jobs in the agriculture sector.
The report, titled ‘Putting Plans into Action: Agriculture and Economic Growth’, provides an economic outlook for crops, animal and horticultural products.
The report puts forward that, since 2003, there has not been a supply shock comparable to the drought of the 2015/16 planting season, when combined with the rapid depreciation of the exchange rate.
It also notes that the rand remains the greatest risk to inflation.
It showed that the cost of a basic food basket, including staples such as rice and brown bread, was R3 503 in April, which is unaffordable to the poorest 40% to 50% of the population.
The monthly cost of a basic food basket rose by 23.8% year-on-year in April, while credit applications have increased by 98% since 2009.
Food inflation is estimated to average 10.75% in the first three quarters of 2017.
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