Food inflation still a concern

Cape Town - Food inflation which, according to Statistics South Africa's latest announcement, stood at 2.4% in January, is still higher than that in developed countries.

The Reserve Bank's target band for inflation is as 3% to 6%. The most recent report from the National Agricultural Marketing Council (NAMC) says that high inflation is something of the past in most countries - except in Turkey and Tanzania, where it is still 9.4% and 11.3% respectively.

In South Africa prices of agricultural commodities have fallen considerably in the past year, but in rural areas prices of grain products have not, but have instead risen.

The prices of wheat between January 2009 and January 2010 fell 24.58%, maize 22.57% and sunflower seeds 18.49%.

In urban areas in the period under review the price of maize-meal products came down 1.43%, but in rural areas it rose 6.94%. Urban prices of wheat products fell 4.93% whereas rural prices were 1.64% down.

The study also examined the cost of a basket of goods in urban and rural areas.

In January last year people in rural areas paid R9.75 more than urban dwellers for the basket. In January this year the difference between what the two groups of consumers paid for the basket widened to R17.49.

The bigger difference is largely ascribed to the difference in prices of rice, maize meal and sugar.

The percentage of their income that the poorest 30% have to spend on food is 33.4%, while the wealthiest 30% spend only 2.6% of on food.

The NAMC says it monitors supermarket food prices only for the first three weeks of each month because in the fourth week supermarkets generally have specials, distorting price trends.

- Sake24.com

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