Food price inflation increases

The July year-on-year increase in the consumer price index for food, as reported by Statistics South Africa (Stats SA), is 17,8% — the highest rate since January 2003, an agriculture body said on Friday.

The rate is also 0,2% higher than the corresponding annual rate of 17,6% in June, said the National Agricultural Marketing Council (NAMC).

Food inflation therefore remains one of the major drivers of overall inflation in South Africa, but its contribution in July to overall inflation was lower than in June, the NAMC said.

The significant price increases for maize products reported over the last year slowed down significantly and even declined in some instances.

”This means relief for poor consumers residing in urban areas relying mainly on staple foods such as maize meal.”

In rural areas, however, maize meal product prices increased on average by 14,47%.

”Given that maize meal is considered a staple food for the poor, and the fact that most of the poor in South Africa live in rural areas, this trend should be of concern and needs to be investigated further,” the NAMC said.

The rate of increase for most wheat products appears to be accelerating.

The increases in brown and white bread prices were 38,31% and 39,59%, respectively, year-on-year.

”The reasons are that wheat product prices lag wheat prices and hence higher wheat prices earlier this year are only reflected now.”

Electricity supply problems and higher distribution costs also contributed to the situation.

The price of sunflower cooking oil increased, on average, by 99,15%, dairy product prices by 17,90%, fresh meat prices by 14,67 % and processed meat prices by 13,15%.

The prices of the main vegetables showed a year-on-year average price increase of 16,42%.

On average, consumers in rural areas paid R1,04 more than consumers in urban areas for selected products monitored by the NAMC.

International commodity prices appeared to have turned over the last few months.

”Notable drops in prices of maize, wheat and rice were seen over recent months; the same applies to dairy products,” the NAMC added.

”These trends should bring some relief for the poorest of the poor.”

Meat prices, however, increased somewhat and were expected to remain under pressure. — Sapa

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