Black frost hit crops in Limpopo during a cold spell in early July, causing widespread damage to potato plantings and other vegetables such as peppers. That spells higher prices for consumers.
As much as a quarter of potato plantings in the province were affected. It is expected to cause shortages and price increases in August and September, industry experts told Business Day.
Limpopo plants about 12,000ha of potatoes, more than 20% of the country’s total plantings of about 52,000ha.
Willie Jacobs, CEO of industry organisation Potatoes SA, said feedback from growers suggested about 2,800ha of plantings in Limpopo were affected by the frost.
“This is about 5% of the country’s total potato crop and it can result in a dip in supply equal to about 7.5-million 10kg bags of potatoes,” Jacobs said.
The shortages would be most pronounced for medium to large potatoes, he said.
They are expected to last for four to six weeks during August and September, after which supply volumes will recover.
Prices for potatoes at SA’s fresh produce markets have already reacted to the expected shortage as large-scale buyers such as greengrocers and caterers stock up in anticipation of price increases over the coming weeks. Prices have risen about R10 per 10kg bag compared with recent averages of R58-R60. Some farmers could also hold back on stock to benefit from higher prices.
Johnny van der Merwe, MD of agricultural forecasting and analysis company AMT, said potato prices at fresh produce markets could double compared with long-term average prices, based on modelling that took into account crop losses during a similar incident of black frost in the 2021 season.
“We think the damage this year is slightly worse than in 2021. Based on the modelling, potato prices can increase to between R120 to R130 per 10kg bag for a few weeks at the end of August and beginning of September,” he said.
Food basket inflation
Potatoes are a staple in SA, and higher prices could put upward pressure on food basket inflation in August and September. However, Van der Merwe said the increase would be short and temporary.
The Reserve Bank and economists have flagged food price increases in the second half of the year as a potential upside risk for consumer inflation.
Inflation numbers published by Stats SA on Wednesday confirm expectations that headline inflation will resume its deceleration, with the June print reported at 5.1%, the lowest level this year.
Food inflation also declined to the lowest since February 2020 at 4.1%, but the month-on-month rate increased from 0.2% in May to 0.3% in June due to increases for bread and cereals, meat, as well as milk, eggs and cheese.
“Annual bread and cereals inflation jumped by 1.2 percentage points from May to 5.2% year on year in June, reflecting the pass-through from the drought-induced price increases in the grain complex over the past few months,” said Paul Makube, a senior agricultural economist at FNB Commercial.
SA’s maize crop is expected to be 18% smaller this season than the previous year because of drought in some production regions earlier in the season.
In response to Wednesday’s inflation data, the Agricultural Business Chamber (Agbiz) said it did not expect potential price increases in the bread and cereals category to be substantial, given upbeat global forecasts for grain production in 2024/25.
Agbiz said vegetable prices could tick slightly higher in the coming months after the damage to potato production in Limpopo. “Still, we expect such to be later in the year, mild and temporary, as the area affected may not be as significant.”
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