Food prices to rise with cost of fuel

2011-04-11 00:00

SHOPPERS are in for a bumpy ride in food prices over the next few months as the recent fuel price hikes begin to kick in.

The latest Food Price Monitor compiled by National Agricultural Marketing Council (NAMC) has warned of higher prices of certain products, including fresh meat.

According to FNB’s AgriCommodities research, beef, mutton and pork prices are expected to remain firm as a result of firmer demand over Easter.

Certain categories of food products — such as maize and fresh vegetables — are expected to remain largely at current price levels over the next month or two.

A senior manager of the NAMC’s Market and Economic Research Centre, Dr André Jooste, revealed that the annual food inflation in January 2011 was 3,1% from 1,5 % in the previous month, representing a significant month-on-month increase.

“This [food price] momentum is provided by strong bullish underlying fundamentals in global soft commodity markets and soaring oil prices.

“Even if the exchange rate gains some lost ground over the next three months, higher oil and therefore fuel and energy prices will have to enter the food supply chains and consumers will likely have to dig deeper into their pockets.

“It is likely that the rise in food inflation will gain pace to reach a level of four to five percent within the next couple of months,” the monitor’s researchers noted.

Although the prices of fresh vegetables such as potatoes, onions and tomatoes are expected to either decline or remain at current levels, the price of beef is expected to remain firm in the coming months.

Consumers have already begun to feel the pinch of higher food prices in recent months.

According to the NAMC’s survey, the average price of cooking oil rose 35% year on year in January 2011 while the average price of lamb (shoulder/braai chops) rose by almost 10% in the same month.

Economists have also warned that interest rates are likely to go up within the next 12 months, mainly as a result of the rising inflation trend.

 

Average survey price January 2010 January 2011

White bread R7,83 R8,31

Brown bread R6,97 R7,30

2,5 kg cake flour R16,57 R17,11

5 kg maize meal (super) R23,64 R22,83

750 ml sunflower oil R12,81 R15,85

500 g margarine R12,88 R12,98

420 g baked beans R7,56 R7,88

2.5kg white sugar R18,15 R19,20

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