Let’s get to the root of the Covid-19 ginger price surge
SA’s ginger suppliers are unable to keep up with demand driven by the plant’s perceived health benefits
The Covid-19 pandemic is at the root of the surging price of ginger worldwide.
Now, the price of the raw ginger in SA is more expensive than meat, with consumers paying as much as R190/kg for the plant’s immunity-boosting properties, as the deadly virus sweeps through the country.
Jaco Oosthuizen, CEO of SA’s largest fresh-produce sales organisation, RSA Group, said halfway through 2020, South African fresh-produce markets had already sold about two-thirds of the amount of ginger sold during the whole of 2019.
“Price fluctuations occur regularly across most produce lines, but events like the Covid-19 pandemic can dramatically affect these dynamics. This appears to be the case with ginger across the global economy and in SA.”
“Ginger illustrates how supply-and-demand forces influence market prices very well at the moment. It’s not an easy crop to grow, because it’s seasonal and quite labour-intensive, so supply is naturally constrained. But the Covid-19 pandemic has seen its popularity soar across the world, thanks to its probiotic properties. Not only are consumers using it directly, but it’s also a very popular ingredient in juices and extracts. As a result, ginger prices have increased a lot over the course of 2020.”
There is a significant demand surge, and it is particularly notable given that restaurant demand for fresh produce has slumped as a result of national lockdown measures.Jaco Oosthuizen, RSA Group CEO
Oosthuizen said the price of ginger in SA now reflects the imbalance between supply and demand.
“There is a significant demand surge and it is particularly notable given restaurant demand for fresh produce has slumped as a result of national lockdown measures.”
Juice Revolution paid R65/kg at the Epping Market in March. On Thursday, the Stellenbosch-based company paid R140/kg for ginger at the same market.
“Whilst there are always price fluctuations, ginger has never been this expensive in all the eight years that we have been in business. If you work on the price at one of the major retailers in SA, their ginger is selling [for] R210/kg at this time.”
“The feedback is that the expensive ginger is from local farmers and the price is due to demand and supply. There is cheaper ginger available that was imported from Spain, China, Turkey, but it got stuck in the ports due to Covid-19. It is now beginning to come on the market,” said operations director Hugo Stander.
The company, which specialises in creating 100% natural, cold-pressed juices, smoothies, health shots, artisan lollies and soups, has seen a significant increase in the demand for juices containing ginger, especially its Ginger Shot.
“A wine estate in Stellenbosch has purchased 800 Ginger Shots for its staff in the past five weeks. We have also seen a shift in purchasing patterns from a weight-loss to a daily health-boosting focus. In addition, we have seen an increase in the sale of our green juices,” MD Fiona Stander said.
Whilst there are always price fluctuations, ginger has never been this expensive in all the eight years that we have been in business.Hugo Stander, Juice Revolution
Last month, when it was fined by the Competition Commission, Food Lovers Market admitted that the average mark-up of 92% and gross profit margin of 47% for raw ginger at its Westgate store in May was “unreasonably high” for an essential product during a national state of disaster.
Consumers complained to the commission when the price of ginger soared to R143,99 that month. At the time, the cost price of ginger was R76,38, lower than the previous month, when the cost price was R106,27 and the retail price was R142,49.
The commission found there was no cost increase in May to justify the 92% mark-up.
In February, Food Lovers Market’s Westgate store sold 68kg of raw ginger. In March it sold 303kg. The demand for raw ginger soared to 442kg in May.
The company was ordered to donate R18,579 to an old-age home in Randfontein, Gauteng.
In April, the World Health Organisation (WHO) warned that ginger was not a cure for Covid-19.
This came after the price of raw ginger soared in Russia as people turned to it as a “Covid-19 remedy”.
Michael Ryan, executive director of the WHO Health Emergencies Programme, said while natural remedies had a positive impact on health, they were not proven medically to fight Covid-19.
“I think we have to be careful with what we would consider to be the traditional remedies that people use for making themselves feel better during the common cold or the flu, or any of this. We’ve all had illnesses and some of us like to take a drink with honey; some like to take ginger.
“Some of us take special herbal teas. Anything that makes one feel better, anything that provides that reassurance and anything that you believe can help your health, that’s not dangerous, certainly has a positive impact on your health.
“But it’s a different thing to say that something is effective in treating the disease. At this moment there is no therapy that has been proven to be effective in the treatment of Covid-19. I would advise that if you have your favourite remedy that you use, like honey, like lemon, like ginger, please continue to support yourself through the illness.
“But please, let us avoid making assumptions, without evidence, that certain things can cure Covid-19. At the moment, there is no proven therapy for Covid-19,” Ryan said.