Fin24

Higher food prices to hit consumers

2012-08-03 14:15

Johannesburg - Droughts, mergers and input costs are expected to push up food prices in the coming months, economist Mike Schussler said on Friday.

"The major impact on the food price now is not just the seed prices but the fact that when the food prices do come down, the maize prices are not going to go down because of the huge, other input costs which are going up," he said in Johannesburg.

Schussler was briefing media on his latest report on the current state of food prices and threats to the food sector.

He said the current drought in the United States was already pushing maize prices up, as the US was the largest maize-growing region and the world's major exporter.

At present, the SA maize price was 44.4% higher in the first seven months of 2012 compared to the first seven months of 2011.

He said that input costs such as electricity, fuel and seeds would still cause high food prices in South Africa, even when the US drought was over.

Schussler said seed, the second-highest input cost for farmers, could go up because of the proposed merger between American seed company Pioneer Hi-Bred and South African company Pannar Seed.

The merger has been approved by the Competition Commission but has been taken to the Supreme Court of Appeal, which would make a decision as to whether it would listen to the matter.

The merger was expected to increase the price of seed by up to 12%. This could be on top of the average price increase of seed in South Africa which is 18%, Schussler said.

"The poorest of the South African consumers will be the hardest hit, because they spend 40% of their income on food."

 

Comments
  • arthur.hugh - 2012-08-03 14:21

    Yeah so you bring Monsanto in to ruin our natural maize, as if that's going to help. Anyway... two bags of groceries (no meat) already cost around R500. Hard times ahead...

  • adrian.tyler - 2012-08-03 14:23

    I'm gonna start eating myself for dinner

  • peter.ndamase - 2012-08-03 14:32

    I would have thought that the input costs will decrease as a result of the merger. Eat less or rather eat when you are hungry, try doing groceries in different retail shops, take advantage of their discounts on prices, bulk buying if there no expiry date on the product.

      wendy.webb.980 - 2012-08-03 17:15

      Peter, your suggestion is fine for those of us who have cars, or who are within walking distance of various options. Unfortunately, I think the poorest often have to go to the closest spaza shop and buy in small amounts because that is all they can pay for. That is a very expensive way of buying.

      andrew.gibbs.1420 - 2012-08-03 19:59

      What about the second closest spaza shop. In my experience poor people don't shop around enough.

  • anelda.bernardo - 2012-08-03 15:26

    somebody is making money out of the poor!!!!!!!!!!!!!!!!!!!!

  • michele.holmes.1238 - 2012-08-03 15:41

    Why on earth are we importing maize???????

      nketso.kgwadi - 2012-08-03 20:05

      For if your uncle van der merwe is selling it @ a higher price we can buy from the american why r we having so many american jewellery stores in SA even if we the biggest exporter of gold in the world haven't u heard about globilisation?

  • andrew.gibbs.1420 - 2012-08-03 19:53

    Now if the government had allowed biofeuls to be made from surplus maize when there was surplus maize there would have been surplus hectares planted whose production would have been available for the tough times. Biofeuls does result in higher average prices for food but if done correctly will reduce peak prices for foods. This is when price is most significant for the consumers. The ban on biofeuls for food was a very stupid thing to do. The liberals really bought the oil companies arguments.

  • andrew.gibbs.1420 - 2012-08-03 19:58

    No one is forcing the farmer to buy the expensive seed. There is very cheap maize seed available. But you must realise if you use old technology seed you must also expect lower yields

      Tsekzen Mabe - 2012-08-04 07:54

      i think ANC must subsidies farmers. again we have to apply import substitute policy because is still a wise way to stop prices increase

      andrew.gibbs.1420 - 2012-08-04 08:55

      Subsidies encourage inefficeiencies.

  • enlightened.bowman - 2012-08-04 08:50

    The prices of food have NOT gone up. I work in that sector. What is happenining is that our Saffa business people want to increase their profit margins even further. Finish.

  • luca.delbianco.3 - 2012-08-04 10:27

    Whats new? In recent years I have never seen a decrease in food prices. It is frankly getting too much.

  • derick.coetzee.56 - 2012-08-05 12:19

    dont worry the more expensive the food the better it tastes.

  • Coursetine Ogodiseng Kgopolo - 2013-03-06 14:14

    I foresee unions striking in the future if prices continue to rise like this which is going to make our situation even worse

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