El Niño threatens December food prices

El Niño threatens December food prices

Cape Town – As El Niño intensifies, the agriculture industry warns of difficult times ahead of the holiday season as food prices are likely to rise due to hot weather conditions.

El Niño is a climate pattern that describes the unusual warming of surface waters in the eastern equatorial Pacific Ocean that comes with extreme weather patterns.

Senior agricultural economist at the National Agricultural Marketing Council, Thabile Nkunjana, said the El Niño phenomenon is very much present, and temperatures in parts of South Africa have reached 44°C, which is concerning for farmers who are busy sowing summer grains for the 2023/24 season, as greater temperatures may result in lower harvests and higher food prices later for consumers.

“As a result, while the El Niño continues, changes in the global grain market will be critical. Local grain and oilseed output, for example, will have a significant impact on local market pricing, potentially cushioning consumers. Also important will be the global situation of grain, because the more grains in the global market, the ‘lower’ grain prices and thus food prices,” said Nkunjana.

He said the effects of El Niño on food prices are unlikely to be realised in the coming weeks.

“With consumers already stretched by economic woes for the majority of 2023, other factors, such as shocks due to geopolitics, trade restrictions, and others, may have a greater impact on food prices than El Niño,” said Nkunjana.

He said: “This season’s El Niño follows a rare four-year streak of heavy rains that have improved soil moisture, implying that even if the country receives below-average rain falls, which the World Bank estimates at 464 mm per year, the situation may not be as dire, particularly if rains fall during critical stages of crop growth.”

According to StatsSA, annual inflation for food and non-alcoholic beverages – a central reason for high headline inflation– dropped from 11.9% in May to 11% in June.

Chief economist of the Agricultural Business Chamber of South Africa, Wandile Sihlobo, said the El Niño period could hurt agricultural production, but is unlikely to be as harsh as the El Niño event seen in 2015/16.

“We come from four consecutive rainy seasons that have significantly improved soil moisture. Hence, we remain positive that the upcoming season will likely be decent, although down from the current large harvest,” Sihlobo said.

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Cape Argus