Food price inflation on the wane

This was evident in the month-on-month price changes of the 20 basic items in The Times shopping trolley for December.

Simphiwe Ngqangweni, senior researcher at the National Agricultural Marketing Council, says that prices of commodities such as maize and wheat have come down since June, which is good news for consumers.

“This will translate into a slower rise in retail food prices, and it is starting to happen,” said Ngqangweni.

“For instance, the maize price has gone down internationally, so we expect lower inflation in terms of maize meal prices.”

One reason behind falling commodity prices is that producers planted more crops in response to last year's high prices.

Lower grain prices mean cheaper feed for livestock, which has helped keep meat price increases in check.

Ngqangweni says a recent study by the NAMC showed that the rate of meat price inflation had slowed in October this year, compared to August this year.

“I think it is a general trend worldwide: if the prices of commodities go down, the related costs of raising livestock will drop because farmers use some of the crops to feed cattle.

“Our conclusion is that the rate of food inflation is likely to slow in the next three months, as a result of commodity prices going down.”

But Ngqangweni cautions that the weaker rand means imports such as farm fertilisers are more expensive for farmers.

“The exchange rate might slow down any price decrease,” he said.

The Times shopping trolley in December shows that the price of tomatoes was between R5 and R9 higher in December than in February.

But analysts say fruit and vegetable prices fluctuate irrespective of the state of the economy, depending on the season.

Source: The Times

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