‘Enormous’ price hikes loom

2016-03-14 13:37
The prices of many vegetables have increased sharply in the three months to January 2016, while the price of maize meal, the staple food of most South Africans, was 21,5% higher per 25?kg bag in January 2016 when compared with the same month a year before, according to the Pacsa Monthly Food Price Barometer.

The prices of many vegetables have increased sharply in the three months to January 2016, while the price of maize meal, the staple food of most South Africans, was 21,5% higher per 25?kg bag in January 2016 when compared with the same month a year before, according to the Pacsa Monthly Food Price Barometer. (Supplied)

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Pietermaritzburg - Agri SA economist Thandi Nkosi has warned South Africans to expect “enormous” price increases in 2016 due to the nationwide drought, which has impacted grain and vegetable farmers.

“The scarcity of fresh produce causes the prices to rise. It is likely to hurt consumers’ pockets until at least the same time next year,” said Nkosi.

It has already become much more expensive to make a salad with the price of onions, tomatoes, cucumber and other fresh produce doubling in the past two months.

Sister paper Beeld surveyed a range of prices on the market floor at the Johannesburg Fresh Produce Market on Friday, which differs markedly from the average prices given for those days at the market.

A 10 kg bag of onions costs between R70-R80 on the market floor, while in January it was R35. According to the market’s average price information, the same bag of onions should have been R47.

A seven kilogram box of tomatoes now costs R75 on the market floor, whereas it was selling for R35-R40 in January.

ZZ2 Tomatoes marketing manager Clive Garret said tomato prices don’t usually increase at this time of the year.

“Less tomatoes were planted because of the drought, but recent hailstorms also destroyed some of the crop,” he said.

The prices of cucumbers and lemons, which were cheaper than usual in January due to heat, which made them grow faster, have also increased substantially.

Subtropico Markets Agents’ Willie Oosthuizen said the extent of the increases had been unexpected.

“The prices have almost doubled due to the demand,” said Oosthuizen.

The market floor prices of a 10 kg pocket of good quality potatoes had shot up to R105-R115 in March, from R80-90 in January.

Potato SA general manager Piet van Zyl said the increase was because there is a shortage of potatoes due to the drought and the quality of potatoes that are available is not so good.

“More potatoes are expected to reach the market in a week or two, and the prices should fall. But they are still going to be expensive through winter,” he said.

Nkosi expects that the impact of the drought on food prices will be felt for a long time still.

“The rain we received recently is good, but is not constant, or enough for every province to recover. Prices should peak in June, and stay at those levels until farmers recover financially,” said Nkosi.

The latest survey ties with the recent findings of the Pietermaritzburg Agency for Community Social Action (Pacsa), which measured prices of food typically bought by low-income families, in the three months to January — at the time Pacsa warned there would be more price increases to come.

In that three months, there had already been a 109,5% increase on a 10 kg pocket of potatoes as measured at certain supermarkets in Pietermaritzburg, a 65,4% increase for a 10 kg pocket of onions and a 78,8% increase for two heads of cabbage.

Economists and agriculture ­organisations have warned for some months now that the price of food would rise substantially due to the severe drought. Food inflation, until November last year, had been low.

Low-income households in particular, which bear the brunt of the employment crisis and low wages, are under severe strain, Pacsa said. — WR.

Read more on:    pietermaritzburg  |  food prices

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