Food pricier in SA - study

Cape Town - A "local culprit" is responsible for South Africa's high food inflation rate, Solidarity trade union said on Tuesday.

It said it had done a study of international inflation trends which showed South Africa's food inflation rate was consistently higher than that of similar countries.

Union spokesperson Jaco Kleynhans said: "This offers additional justification for finding a local culprit for food inflation."

The official food inflation figures of various countries, including the United States, Russia, Australia, Argentina and certain European Union countries were examined.

It emerged that had consistently lower food inflation than South Africa in 2008 and also so far in 2009.

Countries with higher food inflation than South Africa were the exception, Kleynhans said.

In Italy, there was great unrest last year about the rise in food prices.

The highest month-on-month increase in Italy was only 0.5%, while South Africa peaked at two percent.

Argentina experienced sharp increases in its exchange rate last year, yet the peak figure was only 1.1% and food prices had been dropping since January.

"The comparison shows that South Africa's food inflation cannot only be attributed to elements, such as the exchange rate and "external factors".

"Other, additional factors in the South African food industry are at work," Kleynhans said.

The comparison between the food price inflation figures of the various countries showed clear similarities in the periods of increases and decreases.

This could be attributed to international commodity price fluctuations.

However, this still did not explain why South Africa's food price increases had consistently remained way above those of similar countries.

"Part of the answer will be found in the Competition Commission's long-term study about the food supply chain that must be completed so the culprits can be named," Kleynhans said.

- Sapa