Before then, even. Literacy is a lot more than just being able identity individual words; reading to kids goes a long ways towards teaching them literacy skills before they are capable of reading. With modern screen readers and audiobooks, the act of reading isn't necessary for literacy at all.
It is basically the litetacy equivalent of what we've been fighting with math for decades. Having the times tables memorized doesn't mean someone understands multiplication, and understanding multiplication doesn't mean someone can multiply in their head.
And if someone doesn't understand multiplication, they'll struggle with fractions, while the person who understands but can't do multiplication in their head will do ok.