• Contact
Wednesday, February 8, 2023
  • Login
The African Business - News About African business
  • Home
  • EconomyNew
    Zanzibar’s president is looking to make horticulture a significant part of his country’s economy

    Zanzibar’s president is looking to make horticulture a significant part of his country’s economy

    Zimbabwe cuts world’s highest interest rate as inflation eases

    Zimbabwe cuts world’s highest interest rate as inflation eases

    Convergence Partners raises $296 million to drive digital inclusion across Africa

    Convergence Partners raises $296 million to drive digital inclusion across Africa

    Trending Tags

  • Business
    Shell oil tanker questioned over payment of losses and damages

    Shell oil tanker questioned over payment of losses and damages

    Africa: SEFA Grants $1 Million to Seven Countries to Develop Electric Mobility

    Africa: SEFA Grants $1 Million to Seven Countries to Develop Electric Mobility

    Richest African man building fourth cement plant in Nigeria

    Richest African man building fourth cement plant in Nigeria

    World’s Richest Rankings: Aliko Dangote maintain his position as Africa’s richest man

    World’s Richest Rankings: Aliko Dangote maintain his position as Africa’s richest man

    Global tech billionaires eye Zambia’s electric vehicle battery mines

    Global tech billionaires eye Zambia’s electric vehicle battery mines

    Africa will have 57 million pay TV subscribers by 2028, report

    Africa will have 57 million pay TV subscribers by 2028, report

    Africa startups defy funding slump as debt financing fuels growth

    Africa startups defy funding slump as debt financing fuels growth

    Port of Maputo achieves new handling record, sees soaring chrome throughput

    Port of Maputo achieves new handling record, sees soaring chrome throughput

    Court told Anglo turned blind eye to Zambian lead poisoning

    Court told Anglo turned blind eye to Zambian lead poisoning

  • Finance
    Digital banking revolution can help SA banks regain their customers’ love, says BCG

    Digital banking revolution can help SA banks regain their customers’ love, says BCG

    Nigeria launches payments card program to rival Visa and Mastercard

    Nigeria launches payments card program to rival Visa and Mastercard

    Mastercard and ZoodPay join forces to launch the first virtual installment card across EEMEA

    Mastercard and ZoodPay join forces to launch the first virtual installment card across EEMEA

    MoneyGram joins forces with BOTIM to launch international money transfer to over 200 countries

    MoneyGram joins forces with BOTIM to launch international money transfer to over 200 countries

    There was a 25% increase in finance app installs across Africa between 2021 and 2022

    There was a 25% increase in finance app installs across Africa between 2021 and 2022

    Yellow Card expands payment feature across Africa

    Yellow Card expands payment feature across Africa

    Government starts payment of $674,5 trillion matured securities

    Government starts payment of $674,5M matured securities

    South African rand steady with investor focus on Fed minutes

    South African rand steady with investor focus on Fed minutes

    South Africa recently declared bitcoin and other cryptocurrencies to be financial products

    South Africa recently declared bitcoin and other cryptocurrencies to be financial products

  • Opinion
  • Lifestyle
  • Sports
  • Green Economy
No Result
View All Result
  • Home
  • EconomyNew
    Zanzibar’s president is looking to make horticulture a significant part of his country’s economy

    Zanzibar’s president is looking to make horticulture a significant part of his country’s economy

    Zimbabwe cuts world’s highest interest rate as inflation eases

    Zimbabwe cuts world’s highest interest rate as inflation eases

    Convergence Partners raises $296 million to drive digital inclusion across Africa

    Convergence Partners raises $296 million to drive digital inclusion across Africa

    Trending Tags

  • Business
    Shell oil tanker questioned over payment of losses and damages

    Shell oil tanker questioned over payment of losses and damages

    Africa: SEFA Grants $1 Million to Seven Countries to Develop Electric Mobility

    Africa: SEFA Grants $1 Million to Seven Countries to Develop Electric Mobility

    Richest African man building fourth cement plant in Nigeria

    Richest African man building fourth cement plant in Nigeria

    World’s Richest Rankings: Aliko Dangote maintain his position as Africa’s richest man

    World’s Richest Rankings: Aliko Dangote maintain his position as Africa’s richest man

    Global tech billionaires eye Zambia’s electric vehicle battery mines

    Global tech billionaires eye Zambia’s electric vehicle battery mines

    Africa will have 57 million pay TV subscribers by 2028, report

    Africa will have 57 million pay TV subscribers by 2028, report

    Africa startups defy funding slump as debt financing fuels growth

    Africa startups defy funding slump as debt financing fuels growth

    Port of Maputo achieves new handling record, sees soaring chrome throughput

    Port of Maputo achieves new handling record, sees soaring chrome throughput

    Court told Anglo turned blind eye to Zambian lead poisoning

    Court told Anglo turned blind eye to Zambian lead poisoning

  • Finance
    Digital banking revolution can help SA banks regain their customers’ love, says BCG

    Digital banking revolution can help SA banks regain their customers’ love, says BCG

    Nigeria launches payments card program to rival Visa and Mastercard

    Nigeria launches payments card program to rival Visa and Mastercard

    Mastercard and ZoodPay join forces to launch the first virtual installment card across EEMEA

    Mastercard and ZoodPay join forces to launch the first virtual installment card across EEMEA

    MoneyGram joins forces with BOTIM to launch international money transfer to over 200 countries

    MoneyGram joins forces with BOTIM to launch international money transfer to over 200 countries

    There was a 25% increase in finance app installs across Africa between 2021 and 2022

    There was a 25% increase in finance app installs across Africa between 2021 and 2022

    Yellow Card expands payment feature across Africa

    Yellow Card expands payment feature across Africa

    Government starts payment of $674,5 trillion matured securities

    Government starts payment of $674,5M matured securities

    South African rand steady with investor focus on Fed minutes

    South African rand steady with investor focus on Fed minutes

    South Africa recently declared bitcoin and other cryptocurrencies to be financial products

    South Africa recently declared bitcoin and other cryptocurrencies to be financial products

  • Opinion
  • Lifestyle
  • Sports
  • Green Economy
No Result
View All Result
The African Business - News About African business
No Result
View All Result
Home Economy

How Russia-Ukraine conflict could influence Africa’s food supplies

Pressure on food prices will persist: Wandile Sihlobo.

TAB by TAB
25/02/2022
in Economy
0
How Russia-Ukraine conflict could influence Africa’s food supplies
0
SHARES
2
VIEWS
Share on FacebookShare on Twitter

How Russia-Ukraine conflict could influence Africa’s food supplies

No man qualifies as a statesman who is entirely ignorant of the problems of wheat.

Related posts

Zanzibar’s president is looking to make horticulture a significant part of his country’s economy

Zanzibar’s president is looking to make horticulture a significant part of his country’s economy

03/02/2023
2
Zimbabwe cuts world’s highest interest rate as inflation eases

Zimbabwe cuts world’s highest interest rate as inflation eases

03/02/2023
1

The words of the ancient Greek philosopher, Socrates.

How Russia-Ukraine conflict could influence Africa’s food supplies

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.

There is significant agricultural trade between countries on the continent and Russia and Ukraine. African countries imported agricultural products worth US$4 billion from Russia in 2020. About 90% of this was wheat, and 6% was sunflower oil. Major importing countries were Egypt, which accounted for nearly half of the imports, followed by Sudan, Nigeria, Tanzania, Algeria, Kenya and South Africa.

Similarly, Ukraine exported US$2.9 billion worth of agricultural products to the African continent in 2020. About 48% of this was wheat, 31% maize, and the rest included sunflower oil, barley, and soybeans.

Russia and Ukraine are substantial players in the global commodities market. Russia produces about 10% of global wheat while Ukraine accounts for 4%. Combined, this is nearly the size of the European Union’s total wheat production. The wheat is for domestic consumption and well as export markets. Together the two countries account for a quarter of global wheat exports. In 2020 Russia accounted for 18%, and Ukraine 8%.

Both countries are also notable players in maize, responsible for a combined maize production of 4%. However, Ukraine and Russia’s contribution is even more significant in exports, accounting for 14% of global maize exports in 2020. Both countries are also among the leading producers and exporters of sunflower oil. In 2020, Ukraine’s sunflower oil exports accounted for 40% of global exports, with Russia accounting for 18% of global sunflower oil exports.

Russia’s military action has caused panic among some analysts. The fear is that intensifying conflict could disrupt trade with significant consequences for global food stability.

I share these concerns, particularly the consequences of big rises in the price of global grains and oilseed. They have been among the key drivers of global food price rises since 2020. This has been primarily because of dry weather conditions in South America and Indonesia that resulted in poor harvests combined with rising demand in China and India.

Disruption in trade, because of the invasion, in the significant producing region of the Black Sea would add to elevated global agricultural commodity prices – with potential knock on effects for global food prices. A rise in commodities prices was already evident just days into the conflict.

This is a concern for the African continent, which is a net importer of wheat and sunflower oil. On top of this there are worries about drought in some regions of the continent. Disruption to shipments of commodities would add to the general worries of food price inflation in a region that’s an importer of wheat.

What to expect

The scale of the potential upswing in the global grains and oilseed prices will depend on the magnitude of disruption and the length of time that trade will be affected.

For now, this can be viewed as an upside risk to global agricultural commodity prices, which are already elevated.

In January 2022, the FAO Food Price Index averaged 136 points up by 1% from December 2021 – its highest since April 2011.

Vegetable oils and dairy products mainly underpinned the increases.

In the days ahead of Russia’s move, there was a spike in the international prices of a number of commodities. These included maize (21%), wheat (35%), soybeans (20%), and sunflower oil (11%) compared to the corresponding period a year ago. This is noteworthy as 2021 prices were already elevated.

From an African agriculture perspective, the impact of the war will be felt in the near term through the global agriculture commodity prices channel.

A rise in prices will be beneficial for farmers. For grain and oilseed farmers, the surge in prices presents an opportunity for financial gains. This will be particularly welcome given higher fertiliser costs which have strained farmers’ finances.

The Russia-Ukraine conflict also comes at a time when the drought in South America and rising demand for grains and oilseeds in India and China has put pressure on prices.

But rising commodity prices are bad news for consumers who have already experienced food price rises over the past two years.

The Russia-Ukraine conflict means that pressure on prices will persist. The two countries are major contributors to global grain supplies. The impact on prices from developments affecting their output cannot be understated.

Some countries on the continent, such as South Africa, benefit from exporting fruit to Russia. In 2020 Russia accounted for 7% of South Africa’s citrus exports in value terms. And it accounted for 12% of South Africa’s apples and pears exports in the same year – the country’s second largest market.

But from Africa’s perspective, Russia and Ukraine’s agricultural imports from the continent are marginal – averaging only US$1,6 billion in the past three years. The dominant products are fruits, tobacco, coffee, and beverages in both countries.

Ripple effects

Every agricultural role-player is keeping an eye on the developments in the Black Sea region. The impact will be felt in other regions, such as the Middle East and Asia, which also import a substantial volume of grains and oilseeds from Ukraine and Russia. They too will be directly affected by the disruption in trade.

There is still a lot that’s not known about the geopolitical challenges that lie ahead. But for African countries there are reasons to be worried given their dependency for grains imports. In the near term, countries are likely see the impact through a surge in prices, rather than an actual shortage of the commodities. Other wheat exporting countries such as Canada, Australia and the US stand to benefit from any potential near term surge in demand.

Ultimately, the goal should be to deescalate the conflict. Russia and Ukraine are deeply embedded in the world’s agricultural and food markets. This is not only through supplies but also through agricultural inputs such as oil and fertiliser.The Conversation

How Russia-Ukraine conflict could influence Africa’s food supplies

Source: Wandile Sihlobo, Senior Fellow, Department of Agricultural Economics, Stellenbosch University
Previous Post

Paris to host UEFA Champions League final stripped from Saint Petersburg

Next Post

I proposed on the same sofa I had at university

Next Post
I proposed on the same sofa I had at university

I proposed on the same sofa I had at university

RECOMMENDED NEWS

Kenya Airways, SAA sign deal to form pan-African airline, survive slump in business

Kenya Airways, SAA sign deal to form pan-African airline, survive slump in business

1 year ago
3
Airlines’ entry into Entebbe bound to spur growth of hub

Airlines’ entry into Entebbe bound to spur growth of hub

1 year ago
7
DURBAN NORTH RESIDENTS CONCERNED AS BEACHES STILL CLOSED AFTER UPL CHEMICAL FIRE

DURBAN NORTH RESIDENTS CONCERNED AS BEACHES STILL CLOSED AFTER UPL CHEMICAL FIRE

1 year ago
4
Mental health screening at school can reduce chaos

Mental health screening at school can reduce chaos

1 year ago
4

BROWSE BY CATEGORIES

  • Business
  • Economy
  • Finance
  • Green Economy
  • Lifestyle
  • Opinion
  • Sports
  • Uncategorized

Ads

Categories

  • Business
  • Economy
  • Finance
  • Green Economy
  • Lifestyle
  • Opinion
  • Sports
  • Uncategorized
The African Business – News About African business

We bring you the best Premium news about African Business.

Follow us on social media:

Recent News

  • Zanzibar’s president is looking to make horticulture a significant part of his country’s economy
  • Shell oil tanker questioned over payment of losses and damages
  • Africa: SEFA Grants $1 Million to Seven Countries to Develop Electric Mobility

Category

  • Business
  • Economy
  • Finance
  • Green Economy
  • Lifestyle
  • Opinion
  • Sports
  • Uncategorized

Legal Information

Terms and Conditions
Privacy Policy
Complaints Book

  • Contact

© 2021 The African Business

No Result
View All Result
  • Home
  • Economy
  • Business
  • Finance
  • Opinion
  • Lifestyle
  • Sports
  • Green Economy

© 2021 The African Business

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In