Staple foods soon out of reach?

National average food prices increased on average by 13,76% between July 2006 and July 2007, according to the National Agricultural Marketing Council (NAMC)
Issue date 31 August 2007

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National average food prices increased on average by 13,76% between July 2006 and July 2007, according to the National Agricultural Marketing Council (NAMC). A senior researcher at the NAMC’s Markets and Economics Research Centre, Simphiwe Ngqangweni, said this is considerably higher than the June 2007 figure of 9,5% reported by Statistics SA and up from the NAMC figure of 7,58% for March 2007.

Ngqangweni told Business Report that high agricultural commodity prices have fuelled many of the highest rises in food categories, with the maize price being an important contributor to the cost of many products such as meat and milk. Super maize meal rose 22%, pork chops 46,54%, fresh milk 26,3% and cheddar cheese 39,55%. There is growing concern among consumers and government officials over escalating food prices.

However, with demand rising both locally and internationally, prices are set on rising. The fast-growing Chinese economy boosting demand for relatively upmarket food categories such as dairy is one of the big factors contributing to high international food inflation. Another important global price driver is the growing demand for primary commodities like maize and soya beans, which have risen in price due to growing biofuel demand. The NAMC has, for the first time, gathered information on price changes for the majority of food in rural areas.

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This information was collected between January and July 2007. The national average food prices were previously based on prices in metropolitan areas only. “We found maize meal was 38,27% (January) and 26,74% (July) more expensive in rural areas than in urban areas. Prices for other selected food items were also higher in rural areas than urban areas,” said Ngqangweni. – Cornelia du Plooy