Russian war: South African bread in the firing line

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BONUS - RUSTENBURG - Russia’s invasion of Ukraine will make bread in South Africa a lot more expensive, but consumers will only start to feel the pinch three months from now, an economist has warned.

Between them, Russia and Ukraine control more than a quarter of the world’s wheat exports, and Russia’s invasion has caused a surge in the price of essential grains. The ripple effect will start to reflect on retail shelves in South Africa in about three months an economist at Grain SA said. But is not only local bread that will increase - cereal prices will also see a price hike due to higher wheat prices. With the cost of bread edging higher, buying in bulk and storing it may become an attractive proposition. If appropriately sealed in a bag, most shop-bought breads freeze well and can be kept in the fridge for up to six months.
Just where markets will settle – and so how much bread will actually cost – is not yet clear. But between a weaker exchange rate, higher oil prices, and increases in fuel prices, bread prices are set to soar. The war in Europe comes at a time when South African farmers are already battling exorbitant input costs, including double and triple-digit increases in fertiliser costs. Jannie Strydom of Agri Western Cape told media that lower-income groups would be significantly affected by increases in bread prices and other staple foods such as maize meal. “The price of maize is determined by global markets, and should there be a shortage, an increase is inevitable and could result in an increase in staple food prices,” Strydom said. For now, Pick n Pay, one of South Africa’s leading grocery retailers, has been able to contain internal food inflation below the official inflation, it says. It said the coming months would be challenging as fuel costs continue to climb. To exacerbate these challenges, raw ingredient cost inflation to core commodities, such as oil and wheat, is also rising. “These will have an impact on local prices. We will always try to mitigate the impact on customers and fight to keep prices down. These continued efforts have consistently helped us keep our internal selling price inflation well below CPI food inflation,” Pick n Pay said.