Concern around food inflation rebound as black frost decimates key crops

Food shortages could result after black frost caused severe damage for many farmers in Limpopo, an agriculture body warned on Tuesday.

Amid icy weather, black frost struck many parts of the province on Sunday, followed by an even harsher assault on Monday.

This could result in supply shortfall of staple products like potatoes and tomatoes, as well as other crops, said TLU SA.

A surge in food inflation is also likely, FNB's Paul Makube (senior agricultural economist) cautions on The Money Show.

"We're now at 4.3% deceleration since November... and this development is quite a worry on the inflation side given the magnitude of the area impacted."

"Some of the big ticket items impacted are potatoes and tomatoes... Limpopo is your major producing region for tomatoes, and potatoes are about a 22% share of SA's produce."

Paul Makube, Senior Agricultural Economist - FNB

Makube says we're likely to see the impact in the next few months when the harvests fail to arrive from these affected areas.

It's difficult to quantify the loss to farmers at this point because the full extent of the damage is still being assessed.

Of course they have suffered not only crop damage, but also damage to infrastructure like water pipes.

"The damage could amount to millions of rands of losses... not only replacing of infrastructure, but also replanting. With a crop that is seasonal, those farmers will be out of pocket for now and of course the consumer will start feeling the pinch later on when the supply side dries up."

Paul Makube, Senior Agricultural Economist - FNB

Makube says Standard is on standby 'to engage' with affected clients.

"Every crop has its own dynamics - some of them are not necessarily insurable, and if they are, it's quite expensive, especially in the vegetable sector."

"Agriculture is a weather-based business and therefore we understand these cycles and anticipate some of these damages that might occur... We've made provision for those disappointments in the agricultural space."

Paul Makube, Senior Agricultural Economist - FNB