Developing and under-developed countries have to fight it out for what’s left on the world’s food commodity markets, as wealthy countries have more leverage and are in a better position to negotiate preferential treatment, according to FoodForward SA managing director, Andy Du Plessis.
Their advantage in leveraging often leads to wealthier countries artificially increasing food prices because the demand is greater than the supply, he said.
The organisation that secures food and makes it available to those who need it said South Africa needed to take “urgent action” to address the food security crisis or risk increasing social instability.
“It’s time for a different approach to addressing food insecurity. There is a relatively untapped opportunity in terms of using quality, edible surplus food-food that is good for human consumption, but because of supply chain dynamics, liability issues, and market forces, this good food is either dumped in landfills or incinerated, causing a negative impact on the environment,” Du Plessis said.
FoodForward SA said its food price comparison review between 2021 and 2022 showed that basic food prices had risen 12.9 percent in the past year alone. It said the prices of some food categories had increased substantially, with fresh fruit up by 62 percent, fresh vegetables up by 9.3 percent, cereals up by 23 percent, grains up by 12.2 percent and spreads up by 34.5 percent.
World Economic Forum Food Systems Initiative Strategy and Global Projects head Tania Strauss wrote in May that food, agriculture, land and ocean systems were the backbones of society, provided the sustenance essential to life and were central to the global economy, representing $10 trillion or over 12 percent of global GDP today and over 40 percent of all jobs.
Strauss said agri-food systems alone were responsible for a third of global greenhouse emissions, over 70 percent of freshwater use and 80 percent of tropical deforestation and habitat loss. She said even global consumption calculated at $9 trillion did not reflect the true cost of food, which when taken as a complete picture was double that at nearly $20 trillion, including human health, environment and economic costs.
“Global shocks, such as conflicts in Ukraine and elsewhere, the pandemic’s disruption, market volatility from rising food and energy prices, extreme weather caused by climate change, have become the new norm and reinforce the urgency to strengthen the resiliency of agri-food systems,” she wrote.
The National Agricultural Marketing Council’s urban food basket in May showed the nominal cost of the 28 items at R1 073.86 compared with R1 047.05 in April 2022. This represented a monthly decline of 2.6 percent and a year-on-year increase of 9.1 percent.
Statistics South Africa in May 2022 saw an annual 7.6percent increase in price inflation for food and non-alcoholic beverages, 1.6 percent points more than April’s 6.0 percent.
It said a moderate increase in food prices was likely to continue in the coming months, especially for food products either directly or indirectly impacted by the conflict in the Black Sea region. It said some analysts expected this may continue until the first half of next year, but given how fluid the market was, it was difficult to make accurate projections.
Additionally, elements like fuel costs and currency exchange rates were also important contributors to local food prices.
given.majola@inl.co.za
BUSINESS REPORT