Price of maize has rocketed 36 percent as food prices continue to soar
The price of maize, the staple diet of the majority of South Africans, has rocketed a whopping 36 percent over the past year and with recent heat waves and droughts, is expected to increase even further, according to the National Agricultural Marketing Council.
"With recent heat waves across the country threatening the country and lower than normal rainfall in many production areas, concerns about the size of maize and other field crops are being raised," the council said yesterday at the release of its report on food price trends for the year to December.
The study found that food prices on average increased 7,9 percent over the period with maize, beef, chicken and pasta all showing sharp rises.
Maize meal is consumed mainly by some of the poorest communities in the country, but stubborn hot temperatures in key maize heartlands are threatening the availability of maize, which will feed through to the price of maize meal. Maize prices on the JSE's futures market have picked up more than a third since December to trade at about R1800 a ton.
"What we need to realise is that maize and sunflower prices have also gone up on the back of strong international activity," said GrainSA commodities analyst Andrew Fletcher.
Despite the higher maize prices, food price inflation has started showing signs of moderating. According to Statistics South Africa food prices rose 7,7percent in December, down from 9,4 percent in October.
Independent economist Lullu Krugel said in a recent study that despite the price deceleration, people earning the least amount of money would be hardest hit by price increases.
Krugel's study revealed that though high-income earners spent R82000 a year on food, this amounted to only 17 percent of their salaries.
Low-income earners, however, spent an average of R12000 on food, more than half their total earnings.
Fletcher said that all people would be indirectly affected, but there would be a limit to the extent that the price would rise.
"There will always be a substitution when prices go too high," he said. "People will rather consume rice and other foods when maize prices go too high." - With I-Net Bridge