Despite many claiming that food prices are continuing to skyrocket, the Shoprite Group are cautioning those anticipating food price hikes. Shoprite have noted that it “will act strongly in the interest of consumers and not tolerate food price increases which are not based on fundamentals.”
Furthermore, Shoprite have revealed that there are signs that “upward pressure on food prices could be starting to ease,” despite the drought and weak Rand affecting food inflation.
Affordable food is still available
Shoprite Group CEO Whitey Basson, has stressed that there are affordable food options available, despite what some say. In the short term this will help people’s budgets go further.
For example, certain types of protein are cheaper than others. Pork is currently four percent cheaper than a year ago, while the price of beef is 15% higher.
“The prices of frozen chicken, UHT milk and canned vegetables overall have actually decreased during March this year. Starch substitutes such as pasta over potatoes, which are experiencing high inflation due to the drought, haven't had prices impacted to the same extent and can help consumers' budgets go further.
“Not all items have been equally affected either. Frozen vegetables for example, have experienced far lower price inflation of around two percent compared to fresh vegetables (carrots for example are up 60% due to the drought) because of the lag effect on their price combined with longer term procurement contracts that have been secured by the Group,” explained Basson.
Food prices are stabilising
While some food items have increased in price in recent months, Basson pointed out that some food prices have stabilised. However, he added that it may take longer for other prices to come down.
In addition, Basson “warned against those attempting to push through unnecessary price increases fuelled by the frenzy emanating from recent reports about spiralling costs.”
When the effects of the drought start to ease, Basson stated that basic commodity prices will normalise and together with the Rand’s slight strengthening against the US Dollar, the cost of imported goods could start to ease too.
Government to guard against inflation profiteering
To ensure that no companies unduly benefit from inflation, the government has announced plans to guard the public against companies profiting from the drought. In order to accomplish this, the Department of Agriculture, Forestry and Fisheries will keep a close eye on food prices to ensure that stores do not take advantage of the drought to increase their profit margins.
During his budget vote speech on Friday, the Deputy Minister of Agriculture, Forestry and Fisheries Bheki Cele noted the establishment of the Food Price Monitoring Committee (FPMC), which is set “to track and report on food price trends in South Africa and also to provide explanations on the observed trends and advise the Department on any possible action that could be taken when national and household food security is threatened.”
Cele highlighted that food inflation is a major concern for the department. Based on a number of factors, including the drought and the weak Rand, household food security could be negatively impacted.
In a bid to try and diminish the impact of these factors of people’s access to food, Cele revealed the department’s call on people to grow their own food. The department is calling on people, particularly those is ‘food insecure families’, to established back yard or household gardens to enable them to produce some of their own food.