Cosatu outraged over 'maze' of maize prices

"This is particularly worrying as maize is a staple diet for the poor majority of South Africans‚ millions of whom are already struggling to get food on to the table for their families‚" the labour federation said in a statement.

Cosatu said what it objected to most was that South African maize prices were not determined by market conditions in the country but were locked into world cereal prices as fixed at the Chicago Board of Trade. This latest increase is caused by a drought in the United States, which has led to a 36% rise in maize prices around the world.

It is a similar story with soya bean and wheat world prices, which went up by 21% and 32% respectively in the same period 'leading to 18% and 17% increases in South Africa' the federation, added.

"Yet in South Africa there is currently a surplus of maize‚ with 700 000 tons more being harvested than last year‚ and this may rise to 1-million tons. As a result hundreds of thousands of tons are being exported. Last year‚ about 440 000 tons of maize was exported and already this year South Africa has exported about 264 000 tons to Mexico."

Cosatu said if the "free" market was operating properly in South Africa the maize price should fall, not increase.

"But just as in other sectors of the economy‚ like steel‚ there is a practice of 'import parity pricing'‚ which means consumers have to pay what it would cost if we were having to import goods at world market prices even when they are actually produced here."

Cosatu has demanded that the Competition Commission investigate all cases of import parity pricing‚ including the latest maize prices‚ and if this is not already illegal‚ it urged the government to legislate to ban the practice.