* Shoprite reports 25.5% jump in H1 earnings
* Expects further food price increases in H2
* 34 shipping containers cancelled due to Black Sea
disruptions
JOHANNESBURG, March 8 (Reuters) - Shoprite Holdings Ltd
has been forced to source cooking oil, wheat and maize
products from alternative countries as the war in Ukraine
disrupts Black Sea supplies, the CEO of South Africa's largest
grocery retailer said on Tuesday.
With Ukrainian ports closed and operators reluctant to trade
Russian wheat in the face of Western financial sanctions, buyers
are seeking alternatives, triggering a wave of demand for
European Union and U.S. wheat, according to traders.
CEO Pieter Engelbrecht said the retailer had to cancel 34
containers mostly carrying edible oil, maize and wheat products
that were going to sail through the Black sea, with 11 of them
coming directly from the Ukraine.
"We've been able to source it from a different source but we
must not underestimate what the long term impact of this
(disruption) is going to be because Ukraine is the second
biggest exporter in all three of those commodities," Engelbrecht
told Reuters.
Russia and Ukraine account for about 29% of global wheat
exports, 19% of corn exports and 80% of sunflower oil.
Shoprite is also augmenting alternative imports with local
sourcing, but "I really don't know what we're going to do in the
second part of the year," Engelbrecht said.
He said that those imported products represent a small
percentage of the group's overall business.
Food shortages in South Africa are unlikely, with impact
seen mostly on food prices, Engelbrecht said.
Shoprite, which reported a 25.5% rise in half-year headline
earnings per share, said it expects selling price inflation to
move higher during the second half of its financial year, which
began in January, due to mounting inflation pressures.
Consumer goods companies worldwide are battling a surge in
costs of commodities, energy, transport and labour. Russia's
invasion of Ukraine is compounding inflation pressures.
In South Africa, food producers Tiger Brands and
RCL Foods, which service all grocers in the country,
have recently announced plans to take additional price increases
to the market.
In the six months ended Jan. 2, Shoprite's South Africa
supermarkets business had selling price inflation of 2.6%, with
January price increases of 2.5%
($1 = 15.3865 rand)
(Reporting by Nqobile Dludla. Editing by Jane Merriman)