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Government is keeping an eye out for businesses profiteering from drought

| Crime and security

The Department of Agriculture, Forestry and Fisheries is keeping a close watch on food prices to determine if those involved in the food value chain are taking advantage of the drought by excessively increasing their margins, deputy-director-general Elaine Alexander said.

Where this practice did occur, the department would engage with to those involved. The department has already stepped in over the price of maize on the futures market, after the issue was raised by the Congress of South African Trade Unions.

"If there is profiteering, we will investigate further and we will ask for the support of the Department of Trade and Industry to do that," she said at a media briefing held after Agriculture, Forestry and Fisheries Minister Senzeni Zokwana's budget vote speech in the National Assembly on Thursday.

Mr Zokwana said he was concerned about the increase in food prices. The department has established a food price monitoring committee at the National Agricultural Marketing Council (NAMC) to track and report on food price trends.

According to figures released by Statistics SA this week food price inflation increased 9.8% in March compared to March 2015, with bread and cereals rising 13.3% and fruit and vegetables 18.7%.

It said this was the highest monthly year-on-year rise in food since February 2012. Food inflation has followed an upward trend since November 2015, with year-on-year figures of 4.8% (November), 5.8% (December), 7.0% (January), 8.8% (February) and 9.8% (March).

Democratic Alliance spokeswoman on agriculture Annette Steyn noted in her budget vote speech that the NAMC believed the inflation rate could rise to 30% by the end of this year.

The South African Reserve Bank has warned that higher food prices posed a risk to inflation, which stood at 6.3% in March compared with 7% in February, the highest in nearly seven years.

Consumer rights groups have written to the finance and trade ministries, demanding action to curb bread price rises.

"What we are witnessing is a pattern of profiteering in the basic food manufacturing sector that is now causing untold suffering to our most vulnerable citizens," said the Consumer Action Network and the South African Food Sovereignty Campaign.

The nongovernmental organisations said some firms had raised prices up to 30% over the past six months.

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