SADC wary of escalating Ukraine war


Fuel pumps

JOHANNESBURG, (CAJ News) – SOUTHERN Africa is bearing the brunt of the war in Ukraine, with no end in sight to the conflict.

This conflict the Ukrainians are involved in with Russia is impacting on the prices of food, fuel, fertilisers and freight since onset in late February.

The escalations are a massive blow to the Southern African Development Community (SADC) regional bloc that is experiencing the worst outbreak of the coronavirus (COVID-19) in the continent.

According to the World Food Programme (WFP), fuel prices were already inflated before the Ukraine crisis escalated in February this year.

WFP noted countries in Southern Africa were already feeling the impacts in 2021/22, given the heavy dependence on imported crude oil and petroleum products.

Angola, the second biggest producer of crude oil in the continent (after Nigeria), is the sole supplier of the commodity in the region.

WFP stated the onset of the Ukraine crisis pushed the price of crude oil to its highest level since 2014, currently wavering between $100/barrel and $110/barrel.

Globally, this is between 10 percent and 50 percent compared to early February 2022.

WFP noted the global price movement is reflected in Southern African countries where fuel in March increased by 10-26 percent, with further increases expected in the coming months.

The agency highlighted the rise in food and fuel prices stemming from the war in Ukraine was already accelerating inflation in regional countries.

In addition, global freight costs increased by 21 percent on major grains and oil seed routes.

In the South African port of Durban, freight rates have reportedly more than doubled for cereals, pulses, and vegetable oils.

WFP warned the rising food prices are posing a major threat to food security in a region already facing conflict, extreme climatic conditions and the COVID-19 pandemic.

“This will have direct implications on the cost of WFP pipeline which is projected to increase by 25-30 percent,” the agency stated.

WFP noted Malawi, South Africa, Tanzania and Zambia are the four key suppliers of maize in the region.

They are highly import dependent for fertilizer.

“The further rise in fertilizer prices will translate into their lower accessibility, with implications for planting and yield prospects in the next agricultural season,” WFP stated.

The Agricultural Business Chamber (Agbiz) meanwhile stated the destruction brought by Russia’s invasion of Ukraine had a direct and more severe impact on the agricultural market globally.

Both countries contribute substantial volumes of grains, oil-seeds and fertiliser exports.

Collectively, they make up a majority of exports in wheat, barley and sunflower seed.

Agbiz stated related price increases had put pressure on consumers worldwide, just as households were emerging from the economic shock of COVID-19.

“We are starting to see the second round of export bans of key commodities, all with the purported aim of protecting domestic consumers,” Agbiz stated.

– CAJ News

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