SA has little to fear from spiralling global food prices in the short term, said John Purchase, chief executive at the Agribusiness Chamber, a sectoral body representing agribusinesses and companies serving primary food producers.

Figures from the UN's Food and Agriculture Organisation (FAO) this week show food prices last month reached their highest levels ever, surpassing those of the 2008 global crisis that sparked unrest in several countries.

But the strengthening rand has so far offset higher local prices. Recently the rand reached its highest levels in three-and-a-half years, touching R6.55 to the dollar. Last year, the rand firmed by 10% against the US currency.

"We should expect local prices to remain the same or increase (only) marginally. However, this will mainly depend on the exchange rate," Purchase said.

Andrew Jooste, senior manager at the National Agricultural Marketing Council, agreed.

"The strength of the rand is shielding SA from global food inflation. The real risk is if the rand depreciates," he said.

However, Jooste also noted that another factor in the issue is the export-import mix.

"SA is a net exporter of primary agricultural produce. At the same time, it is a net importer of processed agriproducts. So global food price inflation might influence the latter," Jooste said.

According to the Agribusiness Chamber's outlook for agricultural commodities, food prices and crude oil this year, movements in energy prices - especially of crude oil - and natural commodity prices have become closely linked.

The body notes that the upward trend in the price of Brent crude oil over the past six months, from around $72 to around $95 a barrel, is a major concern to industry, as fertiliser prices are closely linked to natural gas and crude oil prices.

"Fertiliser is the major input cost in crop production, and diesel is another major input cost item," it noted.

The chamber added that prices of mutton, beef, pork and poultry would be up on last year and were expected to remain relatively favourable for producers.

SA is a net producer of these products and, as a greater number of the local population achieves middle-class status, demand for higher-value animal protein will increase - in line with global trends currently being experienced.

The outlook for the maize crop is expected to remain bullish with good rainfall over most major producing areas. However, the rains could have undesired outcomes for vegetables such as tomatoes and onions.

Clive Garrett, marketing manager at Limpopo-based ZZ2, the biggest diversified tomato and onion producer in the southern hemisphere, said that if the current rains persisted, tomato prices may increase marginally during the February-March period.

"However, the increase may not be more than 10%. A lot more will depend on other input costs such as fuel and fertiliser. If the fuel price remains largely where it is, there shouldn't be a problem," he said.

"Weather patterns will play a major role in the prices. If we have a cold winter, production will be affected, slightly pushing up the prices. But if we have a reasonable winter, things will be better."

In terms of the fruit industry and fruit prices, local production is fairly positive despite unfavourable weather in some areas.

"On the market side, and given that fruit is a major export commodity, competing on the international market will hold some serious challenges for the year," the Agribusiness Chamber outlook notes. SA exported fruit valued at more than $1.4-billion last year.

Kevin Lings, an economist at Stanlib, said the latest rise in global food prices meant that, over the past year, food prices rose a worrying 31.9% year on year in dollar terms. This is still well below the rate of increase in 2008, when global food prices rose by a staggering 69% year on year.

"However, as recently as June last year, global prices were in a deflation, when measured on an annual basis, highlighting that there has been an alarming increase in food prices over the past six months," Lings said.

He said the FAO data shows a similar trend.

"We first flagged the rise in food prices in August last year. At that point the increase could be attributed to such events as extensive fires in Russia, which impacted their wheat crop, leading to export restrictions and higher global wheat prices," Lings said.

However, he said there had been a broad-based increase in agricultural prices recently, including for sugar and meat, which has started to reflect in various countries' consumer food inflation rate.

"This includes China, India, the US and the euro zone, where consumer food inflation is clearly on the rise.

''The situation is aggravated by current erratic weather conditions in many parts of the world and rising fears of food security," he said.

Lings confirmed the views of Purchase and Jooste that the strong rand, coupled with some margin compression among food manufacturers, has cushioned SA consumers from sharp rises in food prices.

"However, the risks are obvious. A sustained rise in global food prices and/or rand weakness could systematically lead to higher food inflation domestically (especially given the current low base) and higher consumer inflation overall," Lings warned.