SA Inflation on the rise once again

FOOD and beverage inflation from July last year to July this year was at its highest level since July 2009, according to the National Agricultural Marketing Council’s quarterly food monitor, released on Friday.


The food inflation rate for this period was 7,4% .


Speaking at a Group of 20 meeting in June this year, Agriculture Minister Tina Joemat-Pettersson said that in SA and the rest of Africa, price volatility had hit poor people the hardest. Such households spend up to 70% of their income on food. Price instability is estimated to have pushed 44-million people into extreme poverty and hunger since June last year. The minister also warned that price instability had the potential to create the kind of political upheaval seen in many countries during the 2008 food crisis.


Last month was the fifth consecutive month that inflation for food and nonalcoholic beverages was higher than the consumer price inflation rate, which rose 5,3% between July last year and last month , the council said in a report.


The annual increase of 7,5% in the food and nonalcoholic beverages index was largely driven by the annual increases in oils and fats (24,1% ), meat (11,4% ), bread and cereals (9,5% ) and sugar (8,9% ).


The prices of processed food products rose 8,9% from July last year to July this year, and the price of unprocessed food products rose 6,2% over the same period.


Rural consumers paid R12,06 more than urban consumers for the same food basket, a significantly lower price difference than usually reported, the council said in its report. The cereals price index showed the largest increase, 76% annualised, followed by a 64% increase in the sugar price index. Oils increased 57% , meat 22% and dairy products 17% on an annual basis.


The council expected food inflation to rise at a faster rate from next month to November . "Higher commodity prices and increasing costs in the food-value chain are gradually working their way into food prices, and given the typical lag between producer and consumer prices, it is likely that food prices will increase at a faster rate over the outlook period." With Hopewell Radebe


Source -http://iol.co.za
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