Johannesburg - SA families face paying more for food as the cost of staple food looks set to hit a high as oil prices soar and salaries fail to keep up.
THABISO THAKALI AND SHEREE BEGA | SATURDAY STAR
Leading economist Mike Schussler warned on Friday that consumers – already struggling with a seven percent increase in grocery bills over the past year, a 16 percent electricity hike and high fuel prices – could be in for a shock.
“It’s going to go up even more,” he said. “The speed at which the prices go up is also going to increase because of the drought in the US, but your salary doesn’t go up that quite often which means you are going to spend your money on food than anything else.”
Schussler said the misery at the supermarket tills could see an average consumer fork out an extra R20 out of every R100 spend on basic food.
“At the top, depending on the circumstances, those who are like you and me may have to spend an extra R200 on their weekly or monthly grocery bills,” he said. “We are going to feel it in our pockets. Already you are spending R14 to R16 for 2 litres of milk, now you add another R2.25 if the price goes up by 15 percent.”
Schussler said the impact on maize prices of drought in the US maize-growing regions was already evident globally.
He said a further threat to soaring food prices in SA was the proposed takeover of a local seed firm by an American multinational.
The proposed takeover of Pannar Seed by Pioneer Hi-Bred has been the subject of litigation involving the Competitions Tribunal and Competition Commission.
That two multinational firms were likely to benefit at the expense of the consumer made this “a perfect storm”.
“Droughts, mergers and input costs are expected to push up food prices in the coming months,” he said. “Who eats maize? It’s the poorest of the poor and animals, so that means beef is going to going to go up too. The prices impact will go right through the economy.”
Yesterday, Grain SA, an association representing maize farmers, predicted higher prices were in store. Wessel Lemmer, an economist at GrainSA, also blamed the US drought.
“What you see, for instance, for the past month is the corn prices in the US increased by about 18 percent... and we see the maize prices for white and yellow increased to the same extent by 19 percent to 20 percent on a monthly basis (in SA).
Thami Bolani, chairman of Consumer Fair, said all food prices were on the rise.
“We’re seeing the price of vegetables being consistently high, as well as beef, mutton and chicken, which is increasing quite fast. Almost all the basics foodstuffs are increasing across the board.
Schussler said rising grain costs had meant the local maize price jumped to 44.4 percent higher in the first seven months of this year compared with the first seven months of last year.
A loaf of bread sold in urban areas rose by 44c in the same period. - Saturday Star
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