July 29, 2020
Restrictions, and even outright bans, on exporting rice imposed by several amid Covid-19 should not have a short-term impact on South Africa, the National Agriculture Marketing Council (NAMC) said in commentary published on Wednesday.
But SA should be ramping up on local production anyway.
Various restrictions on rice were imposed, and in some cases are still in place, by 12 countries: Vietnam, the Philippines, Myanmar, Mali, India, Kyrgyzstan, Cambodia, El Salvador, Russia, Armenia, Tajikistan, and Belarus.
That could impact even the price of other staples, such as potatoes and mielie meal; “negative implications in the form of a drastic increase in the retail prices of rice and the other closely related staple food items are bound to arise if the various value chain or market players raise fears of dwindling rice stocks in the country,” said NAMC agricultural economist and trade analyst Moses Lubinga.
Some restrictions were already dropped in mid-May, though.
“[A]vailable trade statistical data cannot provide a clear picture of the actual implications coupled with the major uncertainty about the duration of these restrictions. Moreover, the volume of rice consignments, if any, that were in transit at the time these trade restrictions came into force is also not known,” said Lubinga.
Still, SA imports more than 70% of its rice from Thailand, and much of the remainder from India, and so “there are no foreseeable consequences for South Africa due to the restrictive trade measures imposed on rice by some countries during the Covid-19 pandemic, especially if the trade measures are not in effect for a prolonged period,” said Lubinga.
And SA should be able to make up for a shortage in rice with maize meal without too much trouble.
Even so, the NAMC is strongly recommending that SA ramps up on the very small amount of rice produced domestically “in preparation for similar unforeseen trade- distorting shocks that may arise in the near future.”
“The school of thought that South Africa is a water-scarce country, thereby implying that the country cannot venture into commercial rice production, might have to be revisited since existing scientific evidence suggests that there are a number of upland rice varieties that give good yields on dryland,” said Lubinga.
If it looks elsewhere on the continent, SA may also find places where it can “co-invest in rice production in countries with the comparative and competitive advantage to do so, such that rice imports from those specific countries become easily accessible and affordable to South Africa’s consumers,” Lubinga said.