South Africa has experienced the highest rate of food-price inflation since January 2003, the National Agricultural Marketing Council said in its quarterly food price monitor on Thursday.
From April 2007 to April 2008 the increase in the Consumer Food Price (CPI-Food), as reported by Stats SA, was 15,7%. This was 0,4% higher than the corresponding annual rate of 15,3% at March 2008.
These rising costs would continue to threaten household food security especially in poorer households, the council said.
The overall Consumer Price Inflation as reported by Stats SA reflects a year-on-year increase of 11,1% — 5,1% higher than the six percent upper limit for inflation set by the South African Reserve Bank.
Food categories that made the highest contribution included grain products, milk, cheese and eggs, fats and oils, fruits and nuts and vegetables.
The price of brown bread increased by 21,58% and that of white by 26,37%.
The prices of a 5kg bag of super and special maize meal increased by 5,23% and 5,66% respectively.
The council said this was within the inflation band, which meant some relief for the poor who relied on maize meal as a staple.
On average dairy product prices had increased by 24,65%, while meat prices continued to increase at a much slower rate than other food products.
Prices of main vegetables showed increases of 32,85%.
The increase in grain prices was mainly due to pressure on international and domestic grain stocks, while the increases in vegetables prices could be largely attributed to climate change.
The council said input cost pressures were also playing an increasingly important role in pushing prices higher.
In comparing incomes, the trend noted that while rural households received less income than urban ones, rural households spent a larger portion of their income on food.
”Hence, increasing food prices will have a more severe impact on rural households.”
The report showed that total food production had not been able to keep up with population growth, especially for the field crop sector that produced staples largely consumed by the poor.
Trends in agricultural investment were also not optimal. It was also not expected under the premise that land reform was a major government imperative and access to food was regarded as a constitutional right.
The report showed that the gap between real gross and net farming income had increased substantially since 1969 and 1970.
This was attributed mainly to the increase in the real expenditure on intermediate goods and services to maintain agricultural operations.
”This situation seriously hampers the ability of producers to maintain operations and to re-invest in their enterprises,” it said.
According to the medium term outlook, agricultural commodity prices would remain high but stable.
The council noted that factors — from a South African viewpoint — that might change the situation were exchange rate fluctuations, climate events and the ability of producers to access increasing levels of credit. – Sapa