Food price hikes to bite at festive cheer - 12 Dec 2011 iol.co.za/dailynews - Daily News

Festive season consumers will pay higher prices for food, including chicken, meat and vegetables.

The hikes have been fuelled by the increase in diesel and paraffin prices, and a critical maize shortage.

With millions of South Africans already battling poverty and high food prices, this could be a bleak Christmas for many.

Recently, the Department of Agriculture, Forestry and Fisheries announced higher food prices because of the maize shortage. The surge in prices, the department said, would be caused by a shortage of grain feed for animals after South Africa’s maize surplus was exported.

Grain is an important input in most food production. The shortage was attributed to the unusually hot, dry weather in July and freezing temperatures in September which had reduced yields.

Thami Bolani, National Consumer Forum chairman, said people should expect more food price increases with toll road tariff hikes. He said the rand was also not doing well and this had a negative impact on food prices.

“This is something we should expect, especially in protein and rice, because the demand is high globally. People should spend their money wisely to be able to cope with the food prices. There are many unemployed people out there and others spend 50 percent of their salaries on feeding their families,” said Bolani.

Black Sash spokesman, Nkosikhulule Nyembezi, said many households in South Africa were struggling with food security. He said a few households were practising agriculture including farming.

“Government needs to intervene and expand on programmes to alleviate poverty. Many households rely only on grants which means the additional increase will reduce food,” said Nyembezi.

Chicken

Astral Foods spokesman, Philip Tozer, confirmed that chicken prices were much higher than previous years.

“The high cost of maize has pushed up the prices on animal feeds and this had contributed to the chicken price increase. Also, the demand is higher during the festive period which also pushes up the prices.”

CEO of the Red Meat Producers’ Organisation of SA, Gerhard Schutte, said this industry had seen significant prices increases in the last year.

He said generally in the first two weeks of December, red meat prices spiked because of the demand.

“People will pay top prices for red meat before Christmas. The changing weather patterns and cost of animal feeds has increased the producer prices. Animals have also been plagued by diseases such as Rift Valley Fever. This has hit the farmers hard. In the last year, the producer price of beef has increased by 34% and mutton by about 15%.”

“This is well above the inflation rate. But, the demand is high.”

According to last month’s Food Monitor survey, the South African Consumer Price Index (CPI) increased by 6% between October 2010 and October 2011. Food and non-alcoholic beverages inflation increased by 10.6 % between October 2010 and October 2011, the highest level since May 2009.

Since October 2010, food and non-alcoholic beverages inflation has shown a strong increasing trend, from 1% to 10.6 % in the past year. The survey found that the annual increase in food and non-alcoholic beverages inflation was largely driven by the annual increases in oils and fats (22.6%), sugar (14.9%), meat (14.6%) and vegetables (11.8%). The prices of processed food products increased by 10.3% from October 2010 to October 2011 and the price of unprocessed food products increased by 11.5% over the same period.

The outlook for food prices for December 2011 to February 2012 was expected to remain higher than 10% for the next three months.

With the festive season upon us, higher costs will filter down to consumers.

Meat prices generally increase during this period and it is likely that the rate of increase in pork and chicken meat prices could outpace the rate of increase in beef and lamb prices.

Wheat prices have declined over recently and there are no current hints of bread price hikes.

Higher potato prices came sooner than anticipated because excessive rain and frost reduced the size of the potato crop.

This week’s diesel price increase of between 44 and 47 cents a litre, depending on the grade, and the 43 cents a litre hike in he price of wholesale paraffin, was also expected to bump up food prices.

CEO of the Agricultural Business Chamber, John Purchase, warned at a recent COP17 briefing that the effects of climate change on food security could be the biggest shock yet and that the days of cheap food were gone.

Purchase said the evidence of global warming was shown in the higher incidence of extreme weath- er conditions such as droughts, floods, heat waves and cyclones.

“The impact of climate change on agriculture and agriculture water management are uncertain. The biggest concern is the impact on food availability, food access and food utilisation.”