Good summer rains will herald some food price relief for SA

There could be a silver lining to rainy days as experts forecast that a wet summer will bring relief and decreases in some food prices.

The North-West University hosted Are There Rainy Days Ahead webinar to look at what consumers can expect going into the spring and summer rainfall season.

Recently, the Household Affordability Index published by the Pietermaritzburg Economic Justice and Dignity Group indicated the middle class was affected the cost of the average household’s fruit basket, which has increased by R78.91 over a month, from May to June.

Agricultural economist Dr Johnny van der Merwe said Covid had a big impact on the increase in prices. “The grain sector had the most severe increase over the year,” he said.

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Van der Merwe said there was a shift in the market away from luxuries to basic foods since the Covid outbreak.

“There was also an increasing demand for agriculture food and products locally and internationally, [adding] to the spike in food prices.”

He said there were production issues due to slightly lower rainfall and dry weather in the northern hemisphere, which resulted in lower yields and higher prices.

“Just as prices were about to decrease the Russian-Ukraine war broke out and resulted in a lot of uncertainty in the market,” said Van der Merwe.

“Ukraine is a large role player in wheat and sunflower production and this had an impact on those commodities and the expected supply, which had an impact on prices.”

Van der Merwe said this saw a decrease in global economic growth and lower imports and exports to and from certain countries and trading levels on international markets.

“We also see a high interest rate to counter the inflation that has an impact on consumers and their demand for food,” he said.

Van der Merwe said they were expecting grain prices to come down.

Economics professor Waldo Krugell said over the past six months, food and fuel prices shot up and put pressure on everyone.

READ MORE: Low-income South Africans forced to go hungry as food prices explode

“People are struggling. Unfortunately, it doesn’t seem that the bad news will end soon, but it may ease a bit,” he said. Krugell added that prices were easing.

“The oil price has decreased in the past month and we are looking forward to a fuel price relief. It seems things are improving but there are still some increases to come. Producer price inflation is still high and has to find its way to consumers at some stage,” he said.

Krugell said slow economic growth, unemployment rates and inequality remained the problem.

“We see the results in what’s happening in the economy and country at the moment,” he said.

Climatologist Dr Sheldon Strydom said early forecasts suggested summer rainfall areas could expect above-average rain for September, October and November.

He said below-average rainfall was forecast for the western parts of the country going into summer.

Strydom said SA has been experiencing normal to an above-average rainfall for the past few seasons, with an El Nino phase predicted for SA from August until January.

“The early forecast is positive but a lot can change quickly,” he said.

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