Durban - Food prices are soaring and the sharp rise in inflation to a record high of 7.8% is expected to put more pressure on consumers.
This is according to experts who spoke to The Mercury yesterday about the spiralling costs of living, particularly with regard to food.
In a report this week, the Competition Commission South Africa said South African consumers may be facing opportunistic price increases of sunflower oil as processor prices have increased by far more than sunflower seed prices; this has also caused an increase in the price of margarine.
The commission said increases of sunflower oil prices had come at a time when there was widespread concern over food price inflation faced by already struggling consumers.
“To date, the commission’s work in food price monitoring has revealed several concerns in South Africa’s food markets and food value chains. These include wide farm-to-retail spread in prices, large price differences between regions for basic fresh produce, growing margins at the processor and retailer level, as well as the general trend of price inflation that started with the pandemic and has been exacerbated by supply chain constraints and the Eastern European conflict.”
It said its previous two reports had also noted that annual inflation in edible oils and fats was significantly higher than overall food inflation.
The latest report expands on the commission’s previous work by focusing on the sunflower oil value chain and the role of sunflower seed prices as a driver of retail and producer prices.
The report found processor prices had increased by 72% and retail prices by 36% this year alone.
Other matters found included an increase in the wholesale-to-retail price of bread over time.
Regarding maize meal, the report found while retail prices had increased this year, they appeared to be largely related to the increase in the SA Futures Exchange price for white maize but the overall spread had increased somewhat.
The price of a margarine brick increased by 6% from January 2022 to June 2022.
This is significantly lower than the increase in the retail or producer price of cooking oil.”
Mervyn Abrahams, programme co-ordinator at Pietermaritzburg Economic Justice & Dignity Group, said this month the average cost of the household food basket was R4 775.59.
This had increased by R26.72 from July. The year-on-year comparison showed an increase of R534.47 (12.6%) from August 2021.
Abrahams said the high cost of food was a crisis for millions of South African families.
“Maize meal prices continue to climb across all areas. Flour prices also increased in all areas except Durban. Cooking oil continued to increase in Joburg, this month by a further R7.08 or 3%, taking a 5l bottle to R246.91.
“Joburg saw high increases across most meats tracked, with beef increasing by 7%. Frozen chicken prices increased everywhere except Springbok. Tomatoes, butternut and green pepper prices drove higher prices in vegetables, across most areas.”
Professor Irrshad Kaseeram, from the University of Zululand’s Economics Department, said the conflict in Ukraine had affected the price of cooking oil and margarine.
“Ukraine is a bread basket of the world for cooking oil and sunflower seeds,” he said.