Johannesburg - South African consumers are paying high prices for their potatoes, but the trend is not going to continue for long, according to some retailers and industry experts.
South Africa recorded its highest price increase for potatoes last month, with a 10kg bag going up to R76.76 in Cape Town according to the latest information by Potatoes SA.
Read: Drought could force SA to import food
The sharp hike come as the country grapples with rising food prices caused by the worst drought in a decade.
Fresh crops
“Growers with ‘reasonable’ yields will do well because of good prices,” Potatoes SA said.
“Growers with ‘bad’ yields will probably not be able to cover direct costs, even with higher prices.”
But the organisation said the average prices could come down as more potatoes would be coming from the eastern Free State.
Statistics SA said the cost of food in South Africa rose by 8.6 percent in February compared a year ago.
This is a way off from the average of 6.3 percent food inflation achieved between 2009 and now.
Potatoes are a key component in the country’s food basket and are an important staple for the poorest of the poor in South Africa.
The sharp increase in their prices follows a similar trend in other products that poor households consume to survive.
Between January last year and this year, the 10kg potatoes packet has risen 120 percent from R33.30 to R73.32.
During the same period, the price of onions rose by 30 percent from R34.87 to R45.33 while the cost of two heads of cabbage rose by 59.1 percent from R17.95 to R28.55.
AgriSA said food prices would be 15 percent higher by the end of the year, affecting the poorest of the poor who spend up to 40 percent of their total income on food.
Last month the Markets and Economic Research Centre said its food basket survey showed that prices had exceeded the consumer price index.
The centre said food prices in South Africa rose by an average of 8.7 percent between December 2014 and December last year.
An agricultural economist said the food price increases “put a challenge on the affordability of food” and would make it difficult for poor people especially to afford food.
“Even though maize prices continued to increase, consumption would not drastically change in the basic foods category and demand would be maintained even in the face of decreased spend,” the economist said.
“Commodity prices are likely to remain at high levels because of shortages.”
On average, Durban charges R64.78 per 10kg, Johannesburg R64.22 and Pretoria R66.83, much higher than last month’s potato prices.
The drought and hot conditions have had a negative impact on yields in almost all the potato production regions in South Africa with farmers selling 3 million less bags of 10kg potatoes on the markets.
The Shoprite Checkers group said it had tried to keep prices at a minimum.
Group spokeswoman Sarita van Wyk said the company had negotiated with suppliers to manage stringent cost controls.
Drop ahead
“Shoprite is continuously fighting to keep prices lower for its customers, a promise that has been kept for decades and that will continue in the current turbulent economy,” Van Wyk said.
“This stance is manifested in the stringent control of the group’s internal food price inflation, which for the six months to February was measured at 2.4 percent compared to StatsSA’s food inflation figure of 5.9 percent for the same period.”
She said the price of a 7kg pocket of potatoes at Shoprite was currently R69.99 and the price was expected to start easing in the next two months due to the anticipated increase in supply.
Spar and Pick n Pay were not immediately available for comment.
WEEKEND ARGUS