Basic food prices are starting to decrease following the strengthening of the rand, the chairman of the Food Price Monitoring Committee, Johann Kirsten, said on Tuesday.
However, price cuts as drastic as the increases of 2002 were not expected, Kirsten said. Even though raw materials were becoming cheaper, some other cost elements had increased, such as wages and ”processing inputs”.
”Most prices have been moving on a higher plateau and are now starting to come down gradually,” Kirsten said.
His committee has been monitoring the prices of around 26 basic foodstuffs for Agriculture and Land Affairs Minister Thoko Didiza.
They are to hand her a second quarterly report around the end of July.
Kirsten said they would be able to furnish far more price trends this time, as they have been monitoring for longer.
Preliminary data indicated there was still price increases here and there, but overall declines were definitely detected.
The committee noticed several decreases in maize meal prices in the past month, he said.
These prices increased from February 2002, peaked around December 2002, remained steady and then began to come down recently.
Kirsten said millers had reported diminished flow through their mills due to the higher prices and subsequent smaller demand.
”Some milled up to 6000 tons per month less due to the decreased demand.”
Kirsten estimates that it takes on average around four months for maize meal prices to catch up with raw maize price trends.
However, this period could have been increased in the past few months due to the diminished flow, he said.
”It took longer for millers to use up the maize they had bought at expensive prices.” ‒ Sapa