FIFI PETERS: We’re going to talk about food and food security because this week we saw many stores running out of basic foodstuffs like bread and milk – and in some stores even meat – as many people rushed to stock up, afraid the country would run out of food because of the riots.
To update us on the latest situation regarding food stocks I’m joined by Dr John Purchase, the CEO of the Agricultural Business Chamber.
John, thanks so much for your time. My mother tried to go and stock up yesterday and she found that a lot of the stuff was gone. Perhaps you can just give us a bird’s-eye view of how bad the situation regarding food security presently is.
JOHN PURCHASE: Thanks, Fifi, and good evening to everyone. There are risks around food availability, especially in those areas that have been affected by the looting and arson and violence and so on, specifically more so in KZN, KwaZulu-Natal, both around the urban and rural areas. The rural towns have also been hit very hard. The malls have been shut, so in instances (many people don’t have access) to basic foodstuffs.
So Natal or KZN is a big problem. There is generally enough food in South Africa – and more than enough. We export our food. The problem is the distribution of that food into those areas that have been hit by the violence. Around those areas the roads have been closed – like the N3, which has to be reopened. That has to be our number one priority, and opening the Durban port as well.
JOHN PURCHASE: And then the energy is also important, getting the ……[2:03] roller line also open. I think they planned to open that this evening …… this morning, so we’ve got to get the distribution working. We’ve got to show these instigators and criminals that we are taking back control of our supply chains and our food networks, and the like.
Generally in Gauteng there have been incidents, but I think these are now fully under control. I think the distribution networks in Gauteng are working really close to a 100%, if not 100%.
I saw no panic buying today. There is no reason to panic buy – not anywhere but in Natal. We are putting in place special measures with the Consumer Goods Council. We had a good meeting this morning with five ministers under Minister Didiza’s chairmanship. We’ve got a task team going in the private sector and government to make sure that we get through to the destitute in those areas.
So there are processes in place now to ensure that food will be available to everyone across the country.
FIFI PETERS: That’s good to know, John. But, let’s go back to what you were talking about, the closure of Durban port, and also the closure of key transport routes like the N3 – which I believe is quite important in getting food across the country, given that most food stuff is transported via road. How central in our entire value chain, how important is the KZN province in providing the country with food?
JOHN PURCHASE: KZN is important. It’s an important agricultural province, but it’s also an important logistical province, because the Durban port is so important, both in terms of the export and import situation.
We import wheat. One of our big problems or one of our riskier problems is wheat. There are two ships there at the moment that have to offload 60 000 tonnes, and they couldn’t do that over the past few days. But we have prioritised now to get that wheat inland so that we do not have bread shortages. The bread shortages – you actually alluded to that – could get worse if we don’t get that open. And we also need to get yeast, for example, from Durban. That also has to come by road through the N3. Until this afternoon the N3 was not open.
So there could be sporadic shortages of bread, but we believe that we will have the N3 open tomorrow, that it will flow, and that everything will be normalised over the weekend at least.
FIFI PETERS: Today Tiger Brands, which makes Albany bread and also rice and all other forms of snacks that we eat, actually issued a statement and spoke about the fact that its operations in KZN had been hit, and that security of supply will be based on the reopening of the key transport routes that you spoke about.
But I’d like to know about the image that this has had of South Africa and its position in the global-supply value chain. How harmful do you think it’s been?
JOHN PURCHASE: Any of those images, Fifi, are terrible. Those images were broadcast, as you know, globally. We also saw them on our own screens and no investor, no person who wants to do business with you, has confidence in a country that is like that. Let’s be frank and honest about that.
We are in the midst of our fruit-export season, our citrus-export season. We export roughly R30 billion worth of citrus. We are the second-biggest exporter of fresh citrus in the world. It’s so important that we build our client base across the world – there are well over a hundred countries that we export citrus to. We want to create a positive image of healthy, good fruit that we can supply all the time in our global image in terms of our export markets. Last year we exported over US$10 worth of agricultural products.
We have a positive trade balance of close to US$5 billion. I’m not talking rands, but US dollars. So the agricultural sector and the manufacturing sector are incredibly important to our balance of payments, to job creation. Between the agri-processing and the primary agriculture sector we employ over 1.4 million people. That’s more than 10% of South Africa’s workforce. If these things get hit and we lose markets because of our image, it’s really not good news. People must understand the knock-on effects are not good.
FIFI PETERS: We’re talking long term in terms of investments but, just short term, with the situation there at the Durban port, one has to wonder how much stock is sitting there that was due to be exported, and how much stock on the other side is sitting there that was due to be imported – and whether that stock will still be fine, given that foodstuff does go off. It does have a shelf life, John.
JOHN PURCHASE: Absolutely. A very good question too, because the cold stores are fully packed, waiting to be shipped, and we can’t ship them out. There are literally hundreds of lorries that are already on the road that are waiting for it to open, from Harrismith down to Durban. Usually roughly 500 lorries, trucks with containers of citrus per day have got to go through Durban – 500 per day. Now we’ve lost six days. So just over 3 000 trucks are basically not all on the road; some are waiting at their point of departure, waiting to get into the system. Now you’ve got a backlog and the harbour just won’t be able to catch up. So what we’ve also done is we’ve launched, with the government, the Maputo Corridor Export Initiative to try and get the produce out through Maputo. Some are even now trucking down to Cape Town from the north, from the Lowveld, because of the blockage in Durban.
And so yes, it’s incredibly (negative) not just for our exports, but also for our imports. I alluded to the wheat, but there are also other exports that are waiting to get out, and obviously the quality of perishable products like fruit gets compromised in the process.
FIFI PETERS: Yes. John, thanks so much for joining us. I think the message is clear – no need to panic buy at the stage. It’s great to hear that there’s a lot going on behind the scenes between yourselves and government to try and put the situation to bed as quickly as possible. But the potential knock-on effects in terms of the economy and exports and imports that you speak of were also well heard. That’s John Purchase, CEO at Agbiz.