The Agricultural Business Chamber of South Africa (Agbiz) expressed its thanks to several government departments for helping secure the unbanning of South African wool exports to China.
After a five-month trade ban by the People’s Republic of China – amid the presence of foot-and-mouth disease in South Africa – the Chinese government decided this week to start accepting wool exports once again.
Agbiz welcomed the decision with a press statement, saying that it’s a positive development in an “increasingly volatile environment for international trade”.
South Africa also sends between 70 and 80% of its wool clip to China, which means that the ban had put about 8 000 commercial and 40 000 communal farmers’ sustainability at risk.
The successful negotiations were reportedly possible thanks to a protocol that had been developed when South Africa first lost its FMD-free status in 2019. “The protocol was put in place precisely to ensure consistent supply in the wool trade when biosecurity is under threat and these measures needed to be trusted to mitigate any risks posed by the FMD outbreak,” Agbiz said in its statement.
It expressed relief at the “much-needed boost” for the local wool industry, along with its thanks to South African government officials.
“Agbiz and the wool industry worked closely with colleagues in government in reaching out to their Chinese counterparts. Our thanks go out to colleagues in the departments of agriculture, land reform and rural development, trade, industry and competition, and international relations and cooperation.”
‘Chancers’ possibly to blame for food price spikes
In other news, South Africa’s Competition Commission said that rising input costs and global supply chain disruptions might not be the only causes of the food inflation that South Africans are suffering right now.
The commission revealed yesterday that opportunistic manufacturers may be to blame for the unprecedented spike in cooking oil prices, while retailers may have hogged some bread money for themselves.
“Processor prices have increased by far more than sunflower seed prices this year, and retailers have not passed on wholesale cost reductions for bread in the past, resulting in widening retail margins,” the commission said in a statement released on Wednesday.
These findings, contained in its newly released Essential Food Pricing Monitoring Report, are amongst several that involve the country’s food value chain.
Other concerns are “a wide farm-to-retail spread in prices, large price differences between regions for basic fresh produce, growing margins at the processor and retailer level, as well as the general trend of price inflation that started with the Covid-19 pandemic and has been exacerbated by supply chain constraints and the Eastern European conflict”.
Around sunflower oil and bread prices, the main points were:
- There’s and already-high concentration of players in the value chain for sunflower oil and it is still growing. The commission says this opens the door to opportunistic pricing trends.
- Processor prices have increased by 72% and retail prices by 36% in 2022 alone. The commission believes, therefore, that retailers have absorbed some of the increase but that processor price increases exceeded price increases in sunflower seeds.
- Growing processor margins are concerning to the commission as it believes this “may indicate opportunistic pricing behaviour that is not related to costs”.
- Bread prices were another point of concern. The commission noted an increase in the wholesale-to-retail price of bread over time and it believes retailers have not been passed on price decreases in bread to consumers.
The commission said it will continue to monitor food prices closely, especially as global forces are starting to stabilise and could affect potential price decreases.
The full report can be found here.
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