Covid-19 disrupts supply chains, but SA unlikely to have food shortages
There are prospects for an abundant harvest of staple grains and fruit in 2020, which will increase local supplies, one agriculture analysts says
SA is likely to escape the scourge of food shortages now bedevilling countries severely affected by the coronavirus, Wandile Sihlobo, head of agribusiness research at Agriculture Business Chamber (Agbiz), said in a market update on Monday.
The pandemic has caused food shortages in countries such as Italy, Australia, Iran and those in Asia, sparking panic buying and disrupting global supply chains.
“From a national perspective, we doubt this would be the case [shortages in the near-to-medium term] at least for most food products,” Sihlobo said. He said in the unlikely event of potential shortages, it will be due to glitches in the logistics of shipping imports rather than a decline in global essential grains supplies. SA also moved to close some of its ports of entry to combat the spread of the virus, a move that could disrupt trade.
Trade and industry minister Ebrahim Patel said on Monday that the government, business and labour would consider measures to minimise the effect of the coronavirus on the economy, at a Nedlac meeting.
Sihlobo highlighted, however, that SA was an agriculturally endowed country, and generally a net exporter of agricultural and food products.
“What’s more, there are prospects for an abundant harvest of staple grains and fruit this year, which will increase the local supplies,” he said.
The rapidly evolving epidemic of the flu-like virus has rattled world markets, with investors taking a wait-and-see approach as they gauge the effect of the virus on the global economy. SA’s agricultural sector could lose as much as R39.23bn ($2.5bn) in export revenue due to the outbreak.
Sihlobo said that while SA is unlikely to face food shortages, there are, nonetheless, essential imported food products that the country is dependent on such as rice, wheat and palm oil.
Key palm oil suppliers are Indonesia and Malaysia. The typical suppliers of rice are Asia and the Far East, namely Thailand, India, Pakistan, China and Vietnam, some of which are hard hit by the pandemic. In the case of wheat, the suppliers are usually Germany, Russia, Lithuania, the US and the Czech Republic, some of which are badly affected by Covid-19.
“Some of the countries which have reported cases of Covid-19 have not taken drastic measures of limiting business activity, apart from Italy and China, to reduce the spread of the virus. This means the importation of some agriculture products mentioned above into SA could continue unabated, barring any unforeseen eventuality,” Sihlobo said.
Aside from the major products, SA also imports poultry products and sunflower oil, but Sihlobo said these are products that can be replaced by local supplies, should there be disruptions in global supply chains.
“Therefore, the readiness of the domestic food supply chains will perhaps be the ones to be tested in the coming weeks and months if panic-buying arising from fears of the spread of Covid-19 were to peak to levels seen in the UK and US, among other countries. So far, however, there is relative calm in local food markets at retail levels, except for the rising demand for sanitisers,” he said.