The Western Cape Department of Agriculture says there is a great concern regarding the impact the Russian invasion of Ukraine will have on the province’s agricultural trade.
According to a statement by the Department, Russian and Ukrainian 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. The horticultural products, oranges, pears, apples, mandarins, lemons, fresh grapes and wine containers holding 2 litres or less collectively contributed a share of R3.4 billion,” the statement said.
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The statement further indicated that the country’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.
However, statistics show that about 70% to 80% of all wheat flour produced is used for bread baking, attracting an estimated annual consumer expenditure of R6,7 billion in 2020.
“In the Western Cape, 76% of all bread consumed is white bread. Therefore, a limited supply of wheat in the global markets will impact the domestic markets, and the increase in the price of bread will be one of the signs indicating a limited supply of wheat,” the statement added.
- 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 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.
Meanwhile, the Department of Agriculture will also approach the Bureau for Food and Agricultural Policy to monitor the development of blockages in the Western Cape’s agricultural value chain with due consideration to both trade export and import.
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