Guiding consumers since 2009

Food prices could be set to soar

By Staff Writer

South Africans will have to fork out even more for food from 2010 as the economic recovery after the recession continues to gain pace.

The Agricultural Business Chamber said on Monday that they expect the increase in prices to lead to even more service delivery protests.

Most households, in particular those from the lower income level, spend most of their income on food and John Purchase, chief executive of the chamber believes the hike in food prices is likely to cause an uproar and could even lead to more strikes by labour federation Cosatu.

"While food prices are still coming down at the moment... it is going to bottom out probably within the next six months or so," he said on the sidelines of an agriculture conference.

"There will be gradual increases in food prices, we believe, again from 2011. How big that rise is, is very difficult to predict," Purchase added.

South Africa's yearly consumer price inflation slowed much more than expected when it hit a four-year low of 4.8% in April while food prices have continued to stabilize.

Despite the recession being over, households are on a tight budget after about one million jobs were cut which led to high levels of debt and many families are struggling to keep head above water.

Two of South Africa's largest union federations the Congress of the South African Trade Unions and the Federations of Unions of South Africa - led protests against high food prices in 2008 and it's expected that there will be more of the same as the first sign in food inflation will show in the price of maize.

South Africa's agricultural minister said in April the country had secured foreign markets to sell the surplus maize produced in the 2009/10 season to help safeguard maize prices for local farmers.

In April, South Africa's minister of agriculture said that the country had secured foreign markets to sell excess maize products to in order to safeguard maize prices for local farmers.

"We have a big surplus of 4 million tonnes and if it's not all exported... it's going to depress prices probably into the next season quite significantly, that's why I say there is going to be a time lag in this whole period.

"As we see economic recovery taking place we will probably see bigger demand for resources, like oil and fertilizer ... So all this puts pressure on demand for (commodities like maize) and that's going to drive up food prices," he said, adding an upturn in consumer spending power will also add to the pressure."

Recent Articles

Featured What happens to your finances when the interest rate drops?

An interest rate cut simply means that the cost of borrowing is lower, and therefore cheaper. This is sometimes a tool used to encourage economic growth. But what does such a cut mean for your finances?

Raise a deposit for your house in 5 steps

If you’re a first-time home buyer, you could be lucky enough to be  approved for a 100% bond, but if you aren’t, a 10% deposit might be required. This  could be a daunting prospect.  However, a few financial tweaks to your lifestyle and spending habits could get you a foot in the property door and, once you’ve purchased a property, significantly reduce your long-term bond repayments.

Get personal with your finances – and tie the knot

As time passes, your financial products may not live up to your needs. Therefore, it’s important to take stock of what you’re paying for and adjust where necessary. We got in touch with financial advisers to find out how you can get your finances in order, and what you should do to ensure you’re financially stable.

Personal loan or business loan? The best way to finance your business

When starting your own business, you may have to rely on external funding. Perhaps you qualify for a personal loan, but would it be better to take out a business loan instead? We got in touch with a specialist to find out whether it’s best to take out a business loan or a personal loan to assist you with your ongoing business or start-up.

Deals

Cash Rewards up to 20% when you swipe your Absa Card at Spar

Price: Available on request
When: Daily
Where: Nationwide

The Royal Elephant Hotel Valentine's Day Special

Price: Available on request
When: 14 February 2020
Where: Centurion

Premier Hotels Vegan Dinner Special

Price: R225 per person
When: Monthly
Where: Nationwide