A positive outlook for crop production means South Africa’s consumer food price inflation could continue to moderate in the second half of the year and remain contained in 2022.
The positive news of good agricultural production in South Africa is not limited to summer crops and horticulture but extends to winter crops – wheat, oats and canola. The driving force of optimism is favourable weather conditions.
Food shortage is unlikely to be a reality in South Africa. This is why consumers should avoid panic buying as this creates a self-fulfilling prophecy and deepens anxiety. There are large food supplies following a good agricultural season. Also, the resilience of South Africa’s food supply chains will likely withstand the current shock.
One of the lingering questions over the past few months is why global agricultural commodity prices continue to rise in the face of large production figures? We narrow our focus to a few commodities within the grains and oilseed complex to answer this question.
South Africa’s agricultural sector could have expanded more than what we observed in the past decade had it not been hindered by the following challenges, (1) inefficiencies in state administration, (2) infrastructure challenges, (3) lack of security in rural areas and (4) prevailing uncertainty.