15 Mar 2022

Local consumers are urged to brace themselves for price shocks on foodstuffs as the global supply chain is grinding under the weight of pandemic disruptions and the latest being the Russia-Ukraine war. 

Botswana Millers Association (BMA) chairperson Mr Christo Ellis recently indicated in a statement that the global grain prices were skyrocketing as wheat prices have increased by 40 per cent and maize prices by 21 per cent since the invasion of Ukraine by Russia.

Additionally, the oil prices have increased from US$ 78 per barrel beginning of January to US$ 111 per barrel beginning of March thereby, adding more anxiety to the already financially distressed consumers. 

“We can expect disruptions and shortages to continue, along with rising prices for many months to come,” said Financial Analyst from Intuition, Ms Felicity Duncan in view of the statement issued by the Botswana Millers Association.

She said the pressurised supply chain had brought additional stress on the already strained transport networks, manufacturing plants, and infrastructure. 

Ms Duncan said this all added up to danger for the global economy in the form of product shortages, higher inflation, and slower-than-expected growth in key industries. 

Worse yet, she stated, despite efforts by governments and industry, there were few simple solutions to the problems bedevilling supply networks. 

“There are no easy solutions to the problems facing global supply chains and trade finance networks. 

Investment in new capacity including infrastructures such as ports and new ships, trucks, and trains is needed as is a significant investment in human capital,” she said. 

Ms Duncan indicated that working conditions in transportation must improve and wages may have to rise if trucker and sailor shortages were to be eased. 

She added that many countries damaged by the effects of the pandemic were prioritising restoring of productive capacity, and increasing stockpiles. 

“While this may improve the resilience of supply chains, it was costly,” she added. 

Ms Duncan indicated that all of this meant that prices may remain elevated for some time noting that even massive investment would not solve the problems overnight. 

Mr Ellis has, however, promised consumers through a statement that local millers were doing their utmost best to absorb much of the costs as they possibly could but said it was impossible to avoid price corrections of finished goods to the trade. 

He appealed to all players in the food supply chain to be vigilant when it comes to waste reduction which he said had resulted in an increase in the import bill and the cost of production.

He said they have identified the high percentage of food wastage in the country as an area where all players in the supply chain have a role to play, adding that the high damages and returns were forcing millers to look at stricter methods to reduce food wastage. 

Mr Ellis further pleaded with consumers to always buy and insist on locally produced products as part of the efforts to ensure protection of local jobs, creation of new ones, and adding value to the economy.  ends