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Retailers warn of national fruit and vegetable shortages

| Economic factors

Retailers are working with suppliers to make sure they have enough fresh produce on their shelves.

They are also working with suppliers to prevent future produce shortages that might be caused by drought, which has yet to affect availability.

The majority of grocers source more than 95% of their produce domestically.

Vito Polera, national buyer at Fruit & Veg City, said that while produce was still coming in as planned, sudden food shortages might be experienced from next month. Similarly, Shoprite Holdings said the extreme heat in the northern production areas was of great concern and might start having an effect from next month.

"We do not, however, expect shortages in our stores, but there may be a shorter supply of vegetables and seasonal fruit on the national market at that time," said a Shoprite Holdings spokesperson, who cannot be named because of company policy.

Shoprite’s fresh produce procurement arm, Freshmark, has not reported any effect from the drought on availability or price.

In 2012, consumers faced a spike in food prices as a severe drought resulted in rising grain-based food prices, lower livestock production and escalating fruit and vegetable costs, as well as a reliance on imports for certain produce categories.

Pick n Pay spokeswoman Tamra Veley says the group works closely with its suppliers to maintain a sustainable supply chain.

About 94% of the group’s food products are procured from domestic suppliers, which amounts to R40bn in its last financial year.

In a note, Bank of America Merrill Lynch economist Matthew Sharratt said domestic drought conditions had severely affected the summer maize crop.

The latest crop projections from the National Agricultural Marketing Council estimate that the total maize crop will fall 4.4-million tonnes, or 30% this year.

"There are already signs that higher maize prices are feeding into the breads and cereals segment of consumer inflation, which reached a 13-month high of 6.4% year-on-year in September," he said.

Given the constrained economic environment, it is unlikely that food manufacturers, such as Tiger Brands and Pioneer Foods, will be able to absorb surging grain costs, resulting in possible price increases for consumers.

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