Pricey pork makes it costly to bring home the ba­con

The Sunday Independent - - News - BULELWA PAYI

WHILE con­sumers are grap­pling with the one-per­cent­age point in­crease in VAT, they are pay­ing more for pork prod­ucts de­spite the dras­tic drop in price.

From April 1, VAT in­creased from 14% to 15%.

Christo Jou­bert, of the Na­tional Agri­cul­tural Mar­ket­ing Coun­cil (NAMC), said it was too early to de­ter­mine the im­pact of the VAT hike on con­sumers at this stage. How­ever, there could be a dif­fer­ence in spend­ing pat­terns with some con­sumers mov­ing from one prod­uct to an­other.

Jou­bert said the mar­ket was feel­ing the ef­fect of the lis­te­rio­sis out­break and al­though farm­ers had been hit by a fall in pro­tein prices, at the re­tail level this had still not been passed on to con­sumers. Pork prices had started to come down but not as sig­nif­i­cantly as was ex­pected, he added.

“These is­sues are con­cern­ing and hope­fully a res­o­lu­tion will be found soon,” Jou­bert said.

The NAMC mon­i­tors food prices at re­tail level and, based on 28 se­lected items, it re­leases re­ports on food price trends.

Ac­cord­ing to its lat­est re­port, food in­fla­tion de­cel­er­ated to 3.9% dur­ing Fe­bru­ary, which com­pared with 4.5% re­ported in Jan­uary, as a re­sult of a de­cline in agri­cul­tural com­mod­ity prices.

How­ever, egg prices re­mained high as a re­sult of the avian flu out­break.

In Fe­bru­ary, the cost of 28 items in the NAMC food bas­ket, in­clud­ing maize meal, baked and dried beans, chicken, cab­bage, ap­ples, eggs, tinned fish and fresh milk, cost R870 com­pared with R874 in Jan­uary.

How­ever, some items such as Cey­lon tea, eggs, fresh mince, chicken por­tions and cab­bage ex­ceeded the in­fla­tion band of 6%.

An econ­o­mist at the Univer­sity of Stel­len­bosch Busi­ness School (USB), Pro­fes­sor An­dré Roux, said VAT was rel­a­tively low in South Africa com­pared with most coun­tries and con­sumers, in real terms, would be pay­ing up to 0.8% more for some prod­ucts as a re­sult of the in­crease.

“What we don’t know is whether or not sell­ers would raise their prod­ucts by this per­cent­age or more,” he added.

Roux said from about the end of 2016 and the be­gin­ning of last year, food in­fla­tion was about 12% due to the se­vere na­tional drought but the fig­ure had come down dras­ti­cally to about 4.5% by the be­gin­ning of this year.

He said the out­look for food in­fla­tion was ex­pected to con­tinue to ease in the com­ing months, if there were no dras­tic nat­u­ral dis­as­ters, an out­break of bird flu and in­di­rect in­flu­ences such as a change in oil prices and ex­change rates.

Other is­sues that could af­fect food prices were labour and fer­tiliser costs, Roux added.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.