The Western Cape Department of Agriculture intends to call on the Bureau for Food and Agricultural Policy (BFAP) to monitor the development of blockages in the Western Cape's agricultural value chain in terms of exports and imports following Russia’s invasion of Ukraine.

Western Cape Minister of Agriculture Ivan Meyer on March 8 said this would assist the sector in developing an appropriate response to the negative impact the conflict is having on the province's agricultural trade.

The Minister met with agricultural organisations based in the province to discuss concerns about the impact of Russian's invasion of Ukraine on the Western Cape's agricultural trade.

Organisations that participated in the discussions were Agri Western Cape, Vinpro, Wines of South Africa, the Fresh Producers Exporters Forum, GrainSA, the South African Table Grapes Industry, the Citrus Growers Association and the Wool Growers Association.

The Russian and Ukraine markets contribute to South Africa's foreign income derived from exports of agricultural products, with a significant share of these products coming from the Western Cape.

South Africa's agricultural exports to Russia and Ukraine combined were valued at R4.1-billion in 2020. Horticultural products such as oranges, pears, apples, mandarins, lemons, fresh grapes and wine containers holding 2 litres or less collectively contributed a share of R3.4-billion.

About 88% of this value is attributable to the Western Cape, a dominant player in the horticultural sector.

South Africa's wheat and meslin imports from Russia and Ukraine were valued at R2.3-billion in 2020, and the Western Cape absorbed about 28% of those imports in value terms.

Meyer said there was a limited supply of wheat in the global markets which would impact the domestic markets, and that the increase in the price of bread would be one of the signs indicating this limited supply of wheat.

Meyer said the war in Ukraine would potentially cause disruption to agricultural supply chains, with considerable implications for products storage costs and the quality of produce.

"The war between Russia and Ukraine affects South Africa highly. In the Western Cape, this will have a direct impact on food security and the poor. For example, in the province, statistically, the 76% of all bread consumed is white bread. Disruption in shipping, production and security concerns already resulted in a 50% increase in the price of wheat.

“Russia alone is responsible for 14% of global fertiliser exports, while the inability to export and the increase in the price of oil will largely impact fertiliser, fuel and agrochemical prices. Prices of primary agricultural inputs in South Africa are already up by more than 100% compared to January 2021.”

Fertilisers (35% of production costs), fuel (12%) and agrochemicals (8%) are all more expensive than in 2021. Industry role-players highlight that the most significant challenges currently facing the sector are logistics, financial losses and the diversion of fruit to other markets.

The Minister was also concerned that major shipping lines were not accepting any bookings or commodities.

“Ports in Rotterdam, Antwerp, Bremerhaven are extremely congested due to the time-consuming scanning of containers for explosives. The implications are that a 23-day journey of fruit from Cape Town to St Petersburg can be accompanied by various diversions and take up to 93 days to reach its final destination, resulting in the fruit being completely non-edible.”

He also noted that it would be difficult at this point to divert to other markets as other markets used different specifications and requirements.

“At the same time, all the southern hemisphere countries (SA's competitors) are diverting their fruit to the same markets. This is causing an oversupply and thus lower prices/income for SA exporters and producers,” he said.