As South Africans tried to recover from the negative economic impact of Covid-19, the prices of sunflower oil, white and brown bread and maize meal were “opportunistically” and “unjustifiably” increased from January to December 2022.
These findings were contained in the latest “Essential Food Price Monitoring (EFPM) Report” released by the Competition Commission on Tuesday.
The report finds that from January to December 2022, white and brown bread retail prices (20% and 19% respectively) increased faster than producer prices (15% for white bread and 14% for brown bread). This implies that shelf price increases (R15.47 to R18.62 for white bread and R13.99 to R16.61 for brown bread) may not be justified by costs.
The price of maize meal increased 32% from R26.62 to R35.29 from January to December 2022, while the South African Futures Exchange (Safex) price of white maize increased at a slower rate. This resulted in the price of maize charged by farmers being a lower proportion of the retail price of maize meal over the year.
The commission found this concerning and said it may indicate opportunistic behaviour throughout the value chain and raises questions about the use of export parity pricing throughout the maize value chain.
The prices of the five fruits and vegetables were generally volatile over 2022 and an in-depth value chain analysis will be conducted by the fresh produce market inquiry.
Food price increases ‘unjustified’, says Competition Commission
Image: Khaya Ngwenya
As South Africans tried to recover from the negative economic impact of Covid-19, the prices of sunflower oil, white and brown bread and maize meal were “opportunistically” and “unjustifiably” increased from January to December 2022.
These findings were contained in the latest “Essential Food Price Monitoring (EFPM) Report” released by the Competition Commission on Tuesday.
The report finds that from January to December 2022, white and brown bread retail prices (20% and 19% respectively) increased faster than producer prices (15% for white bread and 14% for brown bread). This implies that shelf price increases (R15.47 to R18.62 for white bread and R13.99 to R16.61 for brown bread) may not be justified by costs.
The price of maize meal increased 32% from R26.62 to R35.29 from January to December 2022, while the South African Futures Exchange (Safex) price of white maize increased at a slower rate. This resulted in the price of maize charged by farmers being a lower proportion of the retail price of maize meal over the year.
The commission found this concerning and said it may indicate opportunistic behaviour throughout the value chain and raises questions about the use of export parity pricing throughout the maize value chain.
The prices of the five fruits and vegetables were generally volatile over 2022 and an in-depth value chain analysis will be conducted by the fresh produce market inquiry.
Rising fresh produce prices spark concern
The commission said it is investigating the price of a range of essential food products — bread, cooking oils, maize meal, rice, flour, margarine and pasta — at retail and wholesale levels.
The report also focused on the feed-to-poultry value chain, specifically individually quick-frozen (IQF) chicken products.
The report noted that when chicken imports from the EU were banned in response to the avian flu outbreak, domestic producer prices increased.
“This anomaly requires further interrogation, and the commission will closely monitor the developments in the poultry sector to ensure consumers are not subjected to unjustified price increases.”
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