Kaap Agri said it experienced inflation of 24.2% in its business in the past year, and this was largely due to higher fuel prices. If you take the fuel price out, that inflation number drops to 9.3%. So let’s get the company’s take on inflation and how effective it thinks the higher interest rates that have been implemented by the South African Reserve Bank so far have been in bringing down inflation.
Most certainly. You can’t give people, in an inflation environment of 6% or 7%, a Covid-related type of increase. So that is putting a squeeze on companies in that they are not necessarily seeing their margins increase, owing to the economic pressures that are being elevated by the interest-rate heights. And therefore [with] increases averaging between 6% and 7%, most businesses’ wage bills are going to weigh heavily on their operational expenditure for the year.
I want to touch on that in a moment but, sticking to the comment that you have made about the supply chain and being able to get some of your stuff out, the produce out, and how things are a little better this time around – and the fact that some of the shipping costs have come down a bit – in your statement you also guide that you are seeing some kind of demand shift out there, given the pullback or the slowdown of the global economy in terms of the demand for fruit exports.
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Source: BusinessTechSA - 🏆 24. / 61 Read more »