Rising food prices: SA still safe

Cape Town - Food prices are rising again, just as they did in 2008.

But South African consumers are fortunate because the wave of international food-price increases has not spilled over here yet.

The United Nations Food and Agriculture Organisation (FAO) has warned that the world’s poorest countries are already having to pay 10% more for imported food this year, and next year they will pay 20% more.

National Chamber of Milling chief executive Jannie de Villiers said that South African consumers were fortunate because, at 1.2%, the country's food inflation was below the country's ordinary inflation, which was currently 3.2%.

This was in sharp contrast with the difference between ordinary inflation and food inflation in most other countries. China had an inflation rate of 4.4%, but food inflation was running at 10.1%. Britain's ordinary inflation rate was 3.2%, but that of food 4.5%.

It was against this background that the FAO warned countries to be aware of rising food prices and prepare themselves for additional price shocks.

The expectation was that the this year’s global grain production would be 1.2% down on 2009, with worldwide maize supply shrinking by 12% and that of wheat 10%.

The South African consumer was fortunate and he predicted a satisfactory festive season in terms of food prices, said De Villiers.

He said there was almost zero chance of retail food prices rising in November in December.

It took big food companies up to two months to visit everyone and conclude negotiations.

De Villiers said it was strange that government did so little to encourage farmers to plant, and to rectify problems like rail transport in order to avoid a chaotic situation should conditions become worse.

- Sake24

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