- But Seed Co warns that the extent of the growth opportunity is likely to be diluted by unavoidable imported inflation which will offset higher commodity prices and increased investment in agriculture
The Russia-Ukraine war presents an opportunity for African economies to step up and fill the supply void caused by the escalation of the war, which has brought significant global supply chain ramifications, Seed Co International Limited says in its annual report for 2022.
According to Seed Co Chairman David Long, the duration and scale of the war is unpredictable, as are effects on commodity costs and supply, making African economies that were already fragile and unlikely to withstand the worst of the war’s effects unable to withstand imported global inflation as well as food, energy and chemical shortages. “There are, however, opportunities for African economies to step up and fill the Russia and Ukraine supply void,” Long says. “Africa is set to benefit largely from its minerals, and this has been the reason regional currencies have somewhat held up amidst the upheaval in global financial markets.
“The agricultural sector is also now receiving more attention in Africa in a bid to enhance production and reduce import dependence.” Seed Co, a leading certified seed company in the Africa region, states in the report that it has expectations that its positioning at the root of the food chain is to be supported by the anticipated forced import substitution and increased investment in agriculture to plug the Ukraine and Russia supply gap.
However, the extent of the growth opportunity is likely to be diluted by unavoidable imported inflation which will offset higher commodity prices and increased investment in agriculture. Monetary tightening to curb inflation will also give rise to higher interest rates translating to increased cost of funding business operations. “The impact of the war on the Group’s performance is difficult to quantify at this stage as there is a plethora of counteracting factors at play regionally and globally,” says the report.
“The Group will continue to leverage its business continuity response mechanisms underpinned by the human capital base, brand equity and intellectual property to take advantage of the food security prioritisation amidst global conflicts and the pandemic.” Seed Co develops and markets certified crop seeds, mainly hybrid maize seed, but also wheat, soya bean, barley, sorghum and groundnut seeds. The company is primarily listed on the Botswana Stock Exchange (BSE) since 5 October 2018 and has a secondary listing on the Victoria Falls Stock Exchange since 26 October 2020.