The session focused on the impact of the Russia-Ukraine war on the South African economy. There were excellent speakers, Professors Nicola Viegi and Heinrich Bohlmann, from the University of Pretoria. They provided valuable inputs on energy and macroeconomy dynamics. My input was mainly on agriculture and food supply dynamics. I also commented on the effects of the KZN devastating rains on the sector.
Indonesia has recently banned palm oil exports to protect domestic consumers from rising prices. Such a policy approach by a country that accounted for an average of 54% of global palm oil exports in value terms over the past five years will have profound price implications for the global vegetable oils market.
South Africa’s agricultural import bill in 2021 was US$6,9 billion. The top five imported products that year were palm oil, rice, wheat, poultry meat as well as whiskies and other spirits.
The current geopolitical uncertainty should not detract South Africa from the important work of growing the domestic agricultural sector and expanding export opportunities. The key markets to prioritize in addition to the existing ones are Japan, Bangladesh, China, India, and Saudi Arabia.
The Russia-Ukraine war has raised concerns about potential escalating global food insecurity as these countries are major exporters of grains, oilseeds, fertilizers, and crude oil
In the last quarter of 2021, the value of agriculture, food and beverages exports increased 18% year on year to $2.8bn. This puts SA’s agriculture, food and beverages exports for 2021 at a record $12.4bn. The top exportable products include wine, maize and citrus.
Wheat and other grains are back at the heart of geopolitics following Russia’s invasion of Ukraine. Both countries play a major role in the global agricultural market. African leaders must pay attention.
Direct conflict could disrupt international trade and hit global food stability.