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The high price of our daily bread

| Economic factors

Consumers are being encouraged to rail against soaring food prices, particularly bread, which continue to outstrip inflation by almost double.

Bread now costs 17.5 percent more than it did a year ago, while fruit and vegetables cost a whopping 24.4 percent more, according to the latest national consumer price indices released by Statistics SA on Wednesday.

The South African Food Sovereignty Campaign (SAFSC) believes the increase in the wholesale price of bread in the Western Cape is higher than the national average.

Its monitoring since November reveals a 22 percent increase since last November.

The SAFCS’s Imraahn Mukaddam, who also serves the National Consumer Network, said the bread price was “unrealistically high”, and the financials of major bread producers indicated they were definitely profiteering.

“This is having a knock-on effect, forcing the upward trajectory of the rest of the economy because people are spending a substantial portion of their disposable income on food,” he said.

Although consumer price inflation inched down to 6.2 percent last month from 6.3 percent in March, food and non-alcoholic beverages increased by 11 percent year-on-year. In a month - between March and April - the price of vegetables went up 6 percent, fruit by 5.8 percent and milk and cheese by 2.1 percent.

Milk, egg and cheese went up by 5.1 percent year-on-year last month, oils and fats by 22 percent and sugar, sweets and desserts by 12.1 percent.

The SAFSC wants the government to intervene in the high food prices by initiating market inquiries.

The campaign is preparing to stage pickets against the bread price in Cape Town next week, to follow on from last week’s march in Joburg.

A loaf of white bread costs between R13 and R14 in Cape Town.

Mukaddam said consumers had become resistant and complacent about the food price increases because of the media attention on the weak economy, the plummeting rand and the drought. But he said the actual production costs had to be probed, given that fuel now cost less than it did a year ago, and the international grain price had also dropped.

Last month, GrainSA said it expected the price of bread to have decreased since last December.

GrainSA chief executive Jannie de Villiers said the wheat price only contributed 18 percent to the bread price, and was being used as an “excuse” to drive up the price of bread.

Mukaddam said while the major food producers were not necessarily colluding in the price of bread, he alleged they were monitoring each other’s prices and amending their prices accordingly.

Smaller bread producers, he said, had to be assisted by the government to counter the dominance by the major producers. Consumers were not buying less bread as a result of the price increase, but rather forgoing other foods like fruit and vegetables which, in turn, was affecting the health and nutrition of children under five.

“People are being forced to eat cheap maize replacements that are high in salt. Diets are being affected and it is having a high impact on the health of the nation,” he said.

Mukaddam said the government should consider increasing the social grant during the budget’s mid-term review.

A basic social grant should also be considered to help the poor cope.

“The reality is that it is the most vulnerable who are affected and there is no relief from the state. The government needs to intervene to understand how producers manufacture these substantial food prices,” he said.

The Competition Commission said it planned to complete its investigation into major grocery retailers who are accused of blocking rivals with exclusive mall leases, by May 2017.

The SAFSC estimates that around 14 million people suffer as a result of food insecurity.

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