Home South African SA farmers hopeful Ukraine-Russia deal will ease food price crisis

SA farmers hopeful Ukraine-Russia deal will ease food price crisis

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Local farmers are hopeful that the agreement to reopen Ukrainian Black Sea ports for grain exports will avert a potential worldwide food crisis and ease the rise in global food prices at a time when the cost of living has risen exponentially in South Africa.

File picture: Reuters

LOCAL farmers are hopeful that the agreement to reopen Ukrainian Black Sea ports for grain exports will avert a potential worldwide food crisis and ease the rise in global food prices at a time when the cost of living has risen exponentially in South Africa.

Russia and Ukraine signed a landmark deal on Friday guaranteeing the safe passage of commercial ships from the Ukrainian ports that are cut off by a Russian naval blockade.

Wheat prices rose to the highest level since 2008 this year as the Russian invasion of Ukraine led to grain supply disruptions from two of the world’s largest producers.

Over the past five years, South Africa has on average sourced around 30 percent of its wheat imports from Russia and Ukraine, and a significant amount of maize, oil and fertilisers.

Food prices in South Africa have intensified over the past few months due to the war in Ukraine, leading headline inflation to surge to the highest in 13 years in June.

The latest statistics show that prices of food rose the highest since March 2017 when the country was recovering from severe drought, driven by the rise in bread and cereals, meat, and oils and fats prices.

Agri SA, the biggest federation of agricultural organisations in South Africa, said that the agreement had raised hopes that an international food crisis can be eased.

Agri SA executive director Christo van der Rheede said the Russia-Ukraine war had only brought about destruction and caused havoc worldwide to no one’s benefit.

“Agri SA is grateful that the Russian and Ukrainian representatives managed to put aside their differences to ensure that many countries who are dependent on grain exports will now be in a position to import grain stocks,” Van der Rheede said.

“This is a profound breakthrough and will help to avert a worldwide food crisis. We hope this also signals an end to the conflict.”

Numerous merchant vessels have been trapped in Ukrainian ports along the Black Sea and the Sea of Azov since April, straining global supply chains of vital grain exports.

The Black Sea Grain Initiative will open a path for significant volumes of commercial food exports from three key Ukrainian ports in the Black Sea – Odessa, Chornomorsk and Yuzhny.

The grain agreement, which was brokered by the United Nations (UN) and aided by Turkey, is in force for a period of 120 days and is renewable.

The execution and supervision of this crucial plan will be handled by the joint coordination centre to be established in Istanbul.

UN Secretary-General António Guterres has been highlighting that there was no solution to the global food crisis without ensuring full global access to Ukraine’s food products and Russian food and fertilisers since the war started in February.

Guterres said the shipment of grain and food stocks into world markets will help bridge the global food supply gap and reduce pressure on high prices.

“It will bring relief for developing countries on the edge of bankruptcy and the most vulnerable people on the edge of famine,” he said.

“And it will help stabilise global food prices which were already at record levels even before the war – a true nightmare for developing countries.”

Russia and Ukraine are meaningful contributors to the global food chain, accounting for at least 30 percent of the world’s wheat exports, 20 percent of maize exports and 80 percent of sunflower oil exports.

Ukraine’s wheat has the greatest impact on food security throughout the world, as the country exported at least 18 million tons of wheat in 2020, making it the world’s fifth-biggest wheat exporter.

Turkish President Recep Tayyip Erdoğan said they reached an agreement on all processes from the ships’ departure from Ukrainian warehouses until their safe arrival at the designated port following “an intense and arduous process”.

“With the agreement reached today, we have contributed to averting the hunger that awaits billions of people, from Africa to the Middle East, from America to Asia.

“Additional price hikes owing to productivity losses from the heat wave and drought will be avoided as a result of this step. We also help control food inflation, which has become a global problem.”

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