The Russia-Ukraine war has raised concerns about potentially escalating global food insecurity and the impact this will have on the agricultural sector and exports at large.According to Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa (Agbiz), prices of commodities such as grains, oilseeds, fertilisers, and crude oil have risen significantly – and while South Africa has relatively weak agricultural import ties with both Russia and Ukraine, South African farmers are not immune to price increases.Russia is the 17th largest agricultural products supplier to South Africa, and Ukraine is the 44th. In terms of value, agricultural imports in 2020 from both countries accounted for only 2.4% of South Africa’s total agricultural imports of $5.9 billion.“The major products both countries export to South Africa are wheat and sunf lower oil,” said Sihlobo. “Over the past five years, South Africa imported an average of 1.8 million tonnes of wheat per year, roughly half the annual wheat consumption needs. Of this, wheat imports from Russia and Ukraine averaged 34% and 4%, respectively.”He told Freight News the significance of Russia in South Africa’s wheat imports basket could raise concerns about the near-term supplies. “In the current wheat marketing year that ends in September, South Africa has already imported 40% of its estimated requirement of 1.5 million tonnes. However, it will likely be able to close the import gap for the remaining balance from various countries such as Germany, Canada, Australia and Latvia among others.”According to Sihlobo, this could be at a higher cost than the volumes imported because of the upside pressure the war has added to the commodities market.Despite this, he warned against minimising the importance of these countries to the South African food basket. “Russia and Ukraine may not be major suppliers of agricultural products to South Africa, but they have strong ties with the global grains and oilseeds market given their large export share contributions – and this has an important bearing on commodity prices.”He said this meant the impact of the disruption in trade, would, in the near term, be felt through prices rather than through a shortage of products. Also, from an export perspective, Russia was a notable market, the 13th largest in the country. “South Africa exports mainly citrus, nuts, vegetables, and tobacco to Russia and Ukraine. In 2020 Russia accounted for 7% of South Africa’s citrus exports in value terms, and for 12% of apple and pear exports in the same year – the country’s second-largest market.”Citrus exports have already felt the impact of the war. According to Justin Chadwick, CEO of the Citrus Growers’ Association (CGA), while South African exports to Ukraine over the past three years have been low, there had been a significant upward trend in exports to the destination prior to the war. “This was noticeable in lemons and Valencia oranges. Unfortunately, the conf lict has stopped any exports in 2022,” he said.The significance of Russia in South Africa’s wheat imports basket could raise concerns about the near-term supplies.– Wandile Sihlobo
