Tighten your belts – prices are going up

2013-05-19 10:01

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Maize meal prices could rise by up to 10% later this year and vegetable prices are much higher than a year ago, writes Sipho Masondo.

South Africans have been warned: brace yourselves for even more food price hikes in coming months.

Economists and consumer bodies warn that inflation, now at just under 6%, will rise to 9% by the end of the year.

They blame a weaker rand, high electricity and fuel prices, increased labour costs, droughts and international food-price hikes.

The weak rand means that foods such as grain and red meat – staple foods for many middle class households – are expected to increase.

City Press went to five Gauteng supermarkets in January and again this month to see how the prices have changed (see graphic below).

We found prices to be relatively stable, except for a 20% decrease in the price of beef mince and a 10% drop in chicken.

National Consumer Forum CEO Thami Bolani said this was because “traditionally, the price of meat does tend to drop as we enter winter”.

He also said eggs are more expensive than before, as many use them for protein because meat, chicken and even beans have become “a luxury for many consumers”.

Read: How To ... shop (and save) like a pro

And there’s more bad news.

Efficient Group economist Dawie Roodt said: “Grain is traded on international prices and so if the rand weakens, prices will hike. If grain prices go up, red meat will follow suit, as red meat is grain-fed.”

In January, the National Agricultural Marketing Council found that the price of foods like oranges, tomatoes, cabbage, eggs, sunflower oil, tinned fish, fresh chicken pieces, bread and peanut butter were 8% higher than over the same period last year.

It also warned that maize meal prices could rise by up to 10% later this year and that “vegetable prices are significantly higher than a year ago”.

Dick Forslund, an economist and researcher at the Alternative Information and Development Centre in Cape Town, said: “Fuel prices, the weaker rand, high mark-ups by retailers, and expectations that prices will go up are the reasons food prices are always on the up.”

When fuel prices rose, he said, producers and retailers were quick to increase food prices. But when they fell – as happened earlier this month, by 70c a litre – food prices didn’t follow suit.

Shoprite group spokesperson Sarita van Wyk blamed increasing food prices on manufacturers and producers.

“Suppliers and manufacturers present prices to supermarkets and they are therefore in a better position to explain food-price increases and speculate on what possible increases to expect,” said Van Wyk.

She said the group’s internal inflation has remained at 4.6% over the last nine months, compared to the country’s 5.9%.

Pick n Pay spokesperson Tamra Veley also said they worked hard to keep prices as low as possible.

“We don’t know what inflation will be this year, but we can promise we will keep it as low as we can,” he said.

The anticipated food-price hikes, Bolani said, will further burden the many already struggling to pay for expensive electricity on top of increased school fees and health insurance premiums.

South Africans are already heavily indebted.

Last year, the National Credit Regulator revealed that about 7.3?million of 19.3?million credit-active consumers had accounts more than three months in arrears.

About 3.6?million of these had “deeply impaired” credit profiles.

“Many will be forced to borrow money to buy food”, said Bolani.

Price list comparison store to store

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