Food insecurity as a result of high and prolonged levels of cargo shedding has added to the list of pressures on businesses and consumers.
Tiger Brands, the nation’s largest food maker, said its production plans are based on load reduction schedules and that long outages pose a risk to food safety and increased food waste.
“It is already challenging for food producers and the broader supply chain, including agricultural producers, to manage under current load reduction levels,” Tiger Brands said in response to emailed questions.
“An escalation in current levels of load shedding is likely to present a multitude of operational challenges in supply chain and services beyond the scope of our manufacturing operations. ”
Tiger Brands owns brands such as Jungle Oats, Ace cornmeal, Tastic rice and Albany bread, and operates 44 manufacturing sites.
South Africa is in the midst of its worst power crisis since the start of load shedding 16 years ago, with rolling blackouts of up to 10 hours a day in some areas.
This not only affects homes and businesses, but puts pressure on infrastructure, including water networks.
According to the publication based on data the outlierEskom implemented blackouts for more than 200 days in 2022 and every day so far in 2023.
While Tiger Brands did not respond to questions about how much load shedding has cost it to date, it said its deployment of solar power to mitigate the effects of load shedding at four initial manufacturing sites was in full swing.
The company has entered into power purchase agreements with independent power producers.
“The solar power installation at our home and personal care manufacturing plant in Gauteng was commissioned in December 2022 and we expect installations at our Henneman mill in the Free State, King Foods in the north-west, as well as the beverage manufacturing plant in Gauteng to come online at the end of March 2023. There are plans to expand this during 2023,” the company said.
The initial deployment would generate two megawatts of power, providing one-third of the power use required by the sites that will come online in March.
“The goal is for 65% of the company’s electricity requirements at the manufacturing site level across South Africa to come from sustainable energy solutions by 2030,” said Tiger Brands.
Load shedding has created problems at all stages of the agricultural production chain, affecting irrigation, processing and storage of crops.
The SA Cane Growers Association recently said that growers face worrying yield losses because they have fewer hours of continuous power supply.
“Growers need a minimum of six hours of continuous power for adequate irrigation. As a result of the intermittent power supply, interrupting irrigation, irrigated producers will lose up to 40% of their water capacity,” the sugar association said in a statement.
According to the SA Cangrowers scenario model, continued load shedding at stages four to six will cost producers more than R723 million by 2023. An escalation to stages six to eight could cost the industry more than R1. 8 billion and anything beyond stage eight could cost the industry more than 2.4 billion rand.
Eskom said that in stages one, two and three, customers experience load shedding for two hours once every 32 hours. In stage four, clients receive downloads for two hours four times in 32 hours. During stage five there are around eight hours of load shedding each day. In stage six, Eskom dumps 6,000 megawatts and this translates to two power outages lasting four hours.
Stages seven and eight have yet to be implemented. Stage 8, the highest of the stages, doubles the frequency of stage four. This means that Eskom will lose 8,000 MW and South Africans will lose power up to six times a day, 12 hours a day.
But municipalities with aging and notoriously poorly maintained infrastructure experience longer-than-scheduled blackout periods as their machines and pumps struggle to restart.
SA cane growers said the continuation of load shedding without any arrangements to allow irrigation would also have long-term implications. Cane stalks left in the ground can produce cane for up to 10 years. Insufficient irrigation not only reduces the quality of the cane and causes yield losses, but will also increase mortality, which will significantly shorten the useful life of the cane.
“SA Cangrowers therefore calls on Eskom and the government to help the industry in particular, as well as the agricultural sector in general, to find urgent solutions to mitigate the impact of load shedding.”
The association suggested some short-term measures for the government’s consideration, including restricting load shedding to stage four in irrigated cane growing areas during the peak irrigation season; diesel rebates for producers using generators; and tax rebates for those who invest in alternative energy sources.
Astral Foods, a poultry processing company, recently said in a trade update that South Africa’s food security has been compromised as poultry companies struggle with crippling levels of load reduction.
Astral Foods said its half-year profit could fall “no more than 90%” to 142c for the six months ending March 2023 because it was unable to raise chicken prices to cover rising feed and load reduction costs.
The poultry producer warned that a substantial increase in the selling price of the birds would be required to recover these costs.
In mid-January, the South African Poultry Association said in a statement that the stage six cargo shedding had a dire effect on the country’s chicken and egg industry, with producers having to spend too much on diesel to keep up. companies in operation.
The poultry association said on January 18 that during the previous six weeks, its members “had to culminate more than 10 million day-old chicks due to disruptions caused by cargo shedding.”
Anti-dumping advocacy group FairPlay Movement has called for the removal of the 15% VAT on chicken portions due to “rapidly rising farm costs, including unreliable and increasingly expensive electricity, and the likelihood of price increases of the chicken”.
The group started its VAT-free chicken campaign in 2018 and renewed the call after Russia’s invasion of Ukraine, which led to a spike in chicken prices globally.
FairPlay founder Francois Baird has said that South Africa is facing “a perfect storm” because it is “threatened not only by predatory imports, but also by rising input costs, poor rural infrastructure and cuts of energy per day, with a substantial increase in the price of electricity probably this year”. .
