Food price inflation to drop in 2015?

Cape Town - 090721 - A shopper at a groceries retailer at Vanguard Mall. Photo: Matthew Jordaan

Cape Town - 090721 - A shopper at a groceries retailer at Vanguard Mall. Photo: Matthew Jordaan

Published Dec 24, 2014

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Cape Town - South Africa is the most food-secure country on the continent, and consumers can look forward to a possible decline in food price inflation next year.

The findings of the Global Food Security Index 2014, as published by DuPont, put sub-Saharan Africa at the forefront of food security on the continent, with South Africa leading the way.

In addition, AgriSA president Johannes Möller issued a statement on Tuesday saying consumers can look forward to a “slowdown or even decline” in food price inflation early in the new year.

“In November 2014 food price inflation was still 6.5 percent, but the producer price index for agriculture, forestry and fisheries was 2.3 percent. The latter should within a few months have a diminishing effect on food price inflation.”

Cheaper petrol prices should also deliver more affordable food to homes – provided supermarkets pass along the savings to the customer.

“Expenditure on fuel amounts to 14 percent of agriculture’s expenditure on intermediary goods and services,” he said.

“Indications are that the recent and expected further fuel price cuts will reduce this cost element. The rest of the food value chain should, however, also pass on cost-savings to the benefit of consumers.”

The food security index put South Africa at 61.1 points, faring well against other Brics countries. India stands at 48.3 points, with China at 62.2, Russia at 62.7 and Brazil at 68.1. According to AgriSA, most African countries sit between 30 and 40 in the index, while developed countries score above 80.

“To have certainty about sufficient and nutritious food is of great value to any country, more so for a diverse society such as South Africa,” Möller said. “This is especially the case in the festive season when preparing and enjoying food complements social life and relaxation.”

Further good news is that the country’s agricultural sector is faring well in the international market, with exports amounting to R72.5 billion last year. This figures outstrips agricultural imports by R15.2bn.

“Should favourable production conditions prevail, and considering the weaker rand, the sector can improve on this performance in 2014 and 2015.”

Cape Argus

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