South Africa Food Makers Seen Unable to Handle Drought, Rand
- Record drought decimates crops as rand fuels import costs
- Price of staple white corn more than doubles since 2015 start
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South Africa’s worst drought on record, a plunging currency and debt-burdened consumers are weighing on the country’s biggest food producers, who may sacrifice profits in order to keep prices affordable and preserve market share.
The shares of food producers including Pioneer Food Group Ltd. and RCL Foods Ltd. have this month fallen to the lowest in more than a year as local prices of key staples such as white corn doubled over the same period while wheat rose 25 percent. As the worst drought since records started in 1904 decimates food crops, import costs are surging, with the rand losing 30 percent against the dollar since the start of last year, the worst performer among 16 major currencies tracked by Bloomberg after Brazil’s real.