Pricing pressure here to stay

A month into the second half of the year shows that food prices on most basic household items have increased, with experts warning pricing pressure on consumers could remain until early next year.

In April, the Saturday Dispatch compiled a food basket filled with basic everyday items such as beef mince, chicken pieces, brown bread, maize meal, eggs, potatoes, butternut and milk.

On comparison, the basket of goods, worth around R136 last year, had increased to R204 this year.

A comparison of the items again in four different supermarkets around East London placed a basket with the same goods at R217.11.

While some of the items had increased in price, the comparison showed that others had gone down. The products are:

1kg beef mince is R74.99 per kg, up from R72.99;

1kg chicken pieces R62.99 per kg, up from R56.99;

A loaf of brown bread R10.95, down from R11.69;

1kg maize meal R10.49, which remained the same price;

Dozen eggs R27.90, up from R24;

1kg butternut R7.99 per kg, down from R13.99; and

one-litre milk R9.90, down from R10.99.

Rhodes University tax professor Mathew Lester said there were many factors affecting food prices currently, with the drought being the main one.

Lester said the current exchange rate also played a hand.

“The second half of the year will be affected by exchange rates, the oil price and commodity prices in general actually. The rand fluctuates quite a bit but it’s generally prices down or at least get things to stabilise. I think it’s still a very long road for the consumer.”

Manager in the market and economic research division at Agro Food Chains, Christo Joubert, said the drought was only now affecting certain areas of the country.

He added that on top of the high food prices, a critical white maize shortage was about to hit South Africa.

“Right now we have a shortage of both white and yellow maize. The white maize is used mainly for the human market, while the yellow maize is usually for the animal market. There are talks of bringing maize in from Mexico which could happen in the next two to three months.

“With regards to the drought, some patches of the country are experiencing rain but there are still a lot of farmers having trouble. We still have pressure on that side and that’s the biggest thing driving food prices right now.” Christo said the rising food prices are expected to last until the end of the year into early next year, hopefully stabilising from there.

“But for the moment, I think consumers should just brace themselves for further price hikes.” — zisandan@dispatch.co.za