FOOD PRICES TO FALL FURTHER
Rains not main contributor
THE favourable rainfall is not the main reason why consumers are paying less for food items than last year.
“The rain has had a positive impact on the agricultural sector. However, the reason why some of the fruit and vegetables prices have decreased is primarily because prices tend to go down during the harvesting time,” said Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz.
The recent rain was set to affect the country’s agricultural economy positively. Although overall food inflation had not decreased, South African consumers were enjoying lower fruit and vegetable prices.
“Vegetable and fruit prices have started to go down recently, since around November last year,” Sihlobo said.
News from the potato market was particularly good for consumers.
“A kilogram bag of potatoes is R12.51 currently, a 13% decrease from R14 in April 2016. Stone fruit, like your peaches and plums, have decreased by 5%,” Sihlobo added.
He attributed the lower prices to various factors outside the rain.
“The rain has only been good for the past few months. Although it may seem like a lettuce is fresh when you pick it up from the store, in most occasions it has spent some time in storage. The fruit and vegetables still need to grow and be harvested and that takes time,” Sihlobo said.
Meanwhile, the law of supply and demand was causing a price escalation in the meat industry.
African Farmers Association of South Africa (Afasa) general secretary Aggrey Mahanjana said: “We are paying R30, from R21 per kilogram on live animals.
“Meat was cheaper last year because farmers were selling their stock more from the drought, so there was more. Now that we have rain, farmers are holding back. This is pushing the prices up for the suppliers, which will ultimately be felt by the consumer.”
But Sihlobo said consumers can expect to see overall changes in their direct spending later this year.
“Both average consumers and lowincome households can look forward to a relief in their spending. Food inflation is expected to lessen between 6% to 9% from the current 11.4% in the third quarter.
“White corn production has decreased by 40% to R3 000 per tonne from the initial R5 000 per tonne. Consumers will be able to buy [more food items] at lower prices from July onwards,” he said.
Sihlobo was, however, confident that food inflation should remain low until April 2018, even if the country is hit by another drought.
“This is because the grains produced are a year ahead,” he said.