South Africa witnessed the highest rise in food prices inflation rate in the last five years, according to the National Agricultural Marketing Council in its quarterly food price monitor.
The National Agricultural Marketing Council reveals in its quarterly food price monitor that inflation in the food prices in South Africa has shot to its highest rate since January 2003, as reported by IOL.
According to the statistics released by the council, prices of consumer food increased by about 15.7% during April 2007 to April 2008, which is around 0.4% higher as compared to annual rate of about 15.3% recorded at March 2008. Also, the prices of main vegetables and dairy products increased by nearly 32.85% and 24.65%, while the prices of super and special maize meal grew by about 5.23% and 5.66% correspondingly.
The industry experts consider rise in prices of grain, which is due to increasing pressure on international and domestic grain stocks, as the major reason behind the rise in food prices in the country. Also, increasing use of food grains for production of biofuel is leading to a decline in supply of food grains, thus resulting in a hike in grain prices in South Africa.
Moreover, climatic change is another important reason for the rise in prices of vegetables. The rapidly growing auto sector and industries are leading to a rise in pollution level and are causing inadequate climatic changes, which results in poor production of vegetables. Also, the shooting oil prices are too causing a rise in food prices.
Furthermore, on supply side, the insufficient investment in agriculture of the country and on demand side, increase in demand for food grains due to rising South African population, are some significant reasons for the rise in prices of food in the country. Also, the food industry is unable to generate profits as increasing prices of inputs are pressurizing the working capital of the food producers in South Africa.
A Research Analyst at RNCOS added, “The household food security of South Africa is likely to remain affected by the rising food prices. Thus, by adopting various balance considerations related to critical factors, such as increasing the market competitiveness, effectiveness in economy, social acceptability, environment, food security and choice of feedstock, the South African food industry can improve the situation.”
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