MEDIA RELEASE FOOD PRICE MONITOR · 0.1 %. The overall inflation for China in July 2012 was 1.8 % compared to the 1.7 % in October 2012. Food inflation for July 2012 was 2.4 % as

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MEDIA RELEASE

FOOD PRICE MONITOR: November 2012 EXECUTIVE SUMMARY

The October 2012 Consumer Price Index (CPI) released by Statistics South Africa (Stats SA) showed that the headline CPI was 5.6 % between October 2011 and October 2012. The previous Food Price Monitor (FPM) of August 2012 reported that the food and non-alcoholic beverage index increased by 5.3 % between July 2011 and July 2012. Since the last report, the inflation rate on food and non-alcoholic beverages slowed down on a year-on-year basis by 4.9 % in August 2012 and 5.8 % in September 2012. Inflation on food and non-alcoholic beverages gained momentum in October 2012 to 6.3 %.

At retail level, urban consumers paid R 8.80 for a 700g loaf of brown bread and R 9.88 for a 700g loaf of white bread during the month of October 2012, indicating an 8.91 % and 9.41 % increase, respectively, compared to October 2011. During October 2012, the real farm-to-retail-price-spread for brown bread was R 7.82 and for white bread R 7.08, indicating a 12.17 % and 2.33 % increase, respectively.

When comparing costs associated with typical portion sizes of very poor consumers for the five most widely consumed food items in South Africa, based on October 2012 versus October 2011 prices, the results indicate an inflation of about 12.5 % (from R 3.51 to R 3.95 for the selection of portions). This was, in particular, due to inflation on maize meal, even though the inflation on bread and milk also contributed significantly. This analysis could be viewed as a simple measurement of the impact of food inflation on the poor. The results indicate that the current food inflation conditions have a more significant impact on very poor consumers (12.5 % inflation rate, comparing October 2012 with October 2011), compared to the 'average' consumer's food basket (10.6 % inflation rate, as previously described).

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QUARTERLY FOOD PRICE MONITOR November 2012

1. Foreword

The October 2012 Consumer Price Index (CPI) released by Statistics South Africa (Stats SA) showed that the inflation rate on food and non-alcoholic beverages was 6.3 % between October 2011 and October 2012. The headline CPI was 5.6 % between October 2011 and October 2012. The previous Food Price Monitor (FPM) of August 2012 reported that the food and non-alcoholic beverage index increased by 5.3 % between July 2011 and July 2012. Since the last report, the food and non-alcoholic beverage inflation slowed down on a year-on-year basis by 4.9 % in August 2012 and 5.8 % in September 2012.

Figure 1 shows the year-on-year headline and the food and non-alcoholic beverage inflation rates from October 2011 to October 2012.

The increase in the food and non-alcoholic beverage index was largely due to increases in the following indices: vegetables (9.5 %), fruit (5.4 %), bread and cereals (2.8 %), meat (2.2 %), other food (1.7 %), fish (0.8 %), oils and fats (0.8 %), milk, eggs and cheese (0.7 %) and hot beverages (0.3 %). The price of cold beverages decreased by 0.2 %. On an annual basis, the price of milk, eggs and cheese increased by 8.4 % from October 2011 to October 2012, and the price of bread and cereals increased by 8.3 % over the same period. Other food increased by 7.7 %, meat by 7.3 %, fish by 7.2 %, processed products by 6.9 % and unprocessed products by 6.5 % between October 2011 and October 2012. Figure 2 shows the year-on-year percentage change of the price indices for the different food groups.

Figure 1: Headline CPI and food and non-alcoholic beverage CPI for 2011 – 2012 (year-on-year) Source: Stats SA, 2012

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Figure 2: Year-on-year percentage change for different food categories (October 2011 – October 2012) Source: Stats SA, 2012

2. Overall inflation and food inflation: South Africa and selected countries

Table 1 shows the overall inflation and food inflation rates for South Africa and selected countries for the year-on-year percentage change in October 2012. Turkey, India, Botswana and Namibia experienced the highest overall inflation, while Turkey, Botswana and Namibia have the highest inflation on food and non-alcoholic beverages. The inflation rates for China have decreased by 0.1 %. The overall inflation for China in July 2012 was 1.8 % compared to the 1.7 % in October 2012. Food inflation for July 2012 was 2.4 % as compared to the 1.8 % value in October 2012. Among the BRICS countries, India has the highest overall inflation while South Africa has the highest food inflation rate, i.e. 6.7 %. Even though India’s overall inflation is high compared to the other BRICS countries, its inflation rate for food is the lowest, i.e. 1.6 %.

China and the United States are the countries listed in Table 1 with the lowest overall inflation, while India and the United States still have the lowest food and non-alcoholic beverage inflation rate.

Table 1: Overall inflation and food inflation during October 2012

Country Overall inflation ( %) Inflation on food and non alcoholic beverages ( %)

South Africa 5.6 6.3

Botswana 7.1 7.6

Zambia 6.8 4.2

Turkey 7.8 7.9

Namibia 7.1 10.1

United States 2.2 1.7

United Kingdom 2.7 3.4

Brazil 5.5 1.8

Russia 6.5 1.8

India 7.5 1.6

China 1.7 1.8

Source: Central banks and statistics reporting institutions of these countries, as well as the press

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3. Urban and rural food price trends: October 2011 – October 2012

This section normally reports the price trends for different food items sold in urban and rural areas across South Africa. Price changes for urban food items are reported between July 2012 and October 2012, as well as on a year-on-year basis. Detailed price data on selected food items in urban areas are presented in Appendix A. Due to a new reporting methodology, no rural prices were available as usual.

Appendix B ranks the food items included in this report in the urban and rural areas, according to the inflation experienced. The food products highlighted in Table B.1 are those with annual inflation rates that exceeded the South African Reserve Bank’s (SARB) inflation target of 6 %. Food items in urban areas with an annual inflation rate of higher than 6 % were the following: total beef T-bone (6.18 %); butter, 500g (6.52 %); pork sausage, 1kg (6.59 %); canned peas, 410g (7.06 %); fresh tomatoes, 1kg (7.43 %); chopped peeled tomatoes, 410g (7.56 %); green peas, 1kg (7.68 %); tinned fish (excl tuna), 425g (8.37 %); cheddar cheese, 1kg (8.48 %); long life full cream milk, 1l (8.70 %); eggs, 1.5 dozen (8.78 %); loaf of brown bread, 700g (8.91 %); tinned butter beans, 410g (9.26 %); loaf of white bread, 700g (9.41 %); frozen whole chicken, 1kg (9.41 %); tinned fish (excl tuna), 155g (9.42 %), fresh beef brisket, 1kg (9.56 %); fresh beef mince, 1kg (10.31 %), baby carrots, 1kg (10.80 %); spaghetti, 500g (11.04 %); fresh chicken portions, 1kg (11.06 %); tomato & onion mix, 410g (11.40 %); fresh beef chuck, 1kg (11.64 %); frozen chicken portions, 1kg (11.66 %); fresh full cream milk, 1l sachet (11.78 %); cake flour 2.5kg (12.50 %); enterprise picnic ham 300g (12.58 %); plain macaroni, 500g (12.67 %); fresh whole chicken, 1kg (12.79 %); fresh beef rump steak, 1kg (12.89 %); skimmed powder milk, 1kg (13.36 %); super maize, 5kg (13.80 %); fresh sweet potatoes, 1kg (14.00 %); medium fat spread, 1kg tub (14.80 %); fresh full cream milk, 2l (14.86 %); bull brand meatballs in gravy, 400g (15.33 %); fresh low fat milk, 2l (15.80 %); fresh cauliflower, 1kg (17.18 %); fresh low fat milk, 1l sachet (21.88 %); king korn, 1kg (24.60 %); fresh cabbage, 1kg (27.64 %); tinned tuna, 170g (27.69 %); maize special, 5kg (41.09 %); fresh oranges, 1kg (41.46 %); and fresh lettuce, 1kg (48.99 %).

A closer look at food price trends:

The international price of wheat (US No.2, Hard Red Winter ord. Prot, US Fob Gulf) increased by 50.66 % while its domestic price increased by 22.45 % from October 2011 to October 2012. At retail level, urban consumers paid R 8.80 for a 700g loaf of brown bread and R 9.88 for a 700g loaf of white bread during the month of October 2012, indicating an 8.91 % and 9.41 % increase, respectively, compared to October 2011. During October 2012, the real farm-to-retail-price-spread for brown bread was R 7.82 and for white bread R 7.08 , indicating a 12.17 % and 2.33 % increase, respectively.

The international price of yellow maize (US No.2, Yellow, U.S. Gulf) increased by 20.10 % between October 2011 and October 2012. However, on a month-to-month basis (September 2012 to October 2012), the international price of yellow maize decreased by 1.19 %, due to slower demand from the livestock (feed) and industrial (biofuels) sectors. During the same period, the price of domestic yellow maize increased by 16.61 %. The domestic price of yellow maize traded at an average of R 2 452.88 per ton during the month of October 2012.he domestic white maize price increased by 13.03 % compared to October 2011. At the retail level, urban consumers paid 13.80 % more for a super maize meal (5kg) and 41.09 % more for special maize meal (5kg) in October 2012, compared to October 2011. The price of 5kg super maize meal and 5kg special maize meal increased from R 25.95 to R 30.72 and R 18.37 to R 28.59, respectively, between October 2011 and October 2012.

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The sunflower seed price traded at R 5 936.56 per ton in October 2012. On an annual basis, the price of sunflower seed increased by 45.21 % between October 2011 and October 2012. In urban areas, the price of sunflower cooking oil (750ml) increased by 4.25 %. The international sunflower price increased by 29.20 % between October 2011 and October 2012.

The annual increase in retail price of beef cuts ranged from 6.18 % for beef t-bone per kg to 12.89 % for fresh beef rump steak per kg. Fresh lamb per kg showed an annual price decrease of 4.98 % between October 2011 and October 2012 at retail level. The retail price of whole fresh chicken and whole frozen chicken increased by 12.79 % and 9.41 %, respectively.

4. Comparison between urban and rural prices

This section intended to compare the prices paid by rural and urban consumers but, due to a new reporting methodology, no rural prices were available. 5. Price trends (week 4 of each month)

Prices normally cited in the FPM are obtained from Stats SA and AC Nielsen (see Appendix F for more details on how the prices are collected). An important issue to note is that Stats SA and AC Nielsen do their price collection during the first three weeks of the month. During the fourth week of each month, retailers usually have specials on various items they sell, which is the reason why prices are not collected during that week. In an effort to include food price trends during week 4 for five retail chains, data was obtained from Adcheck.

In an attempt to report prices of selected food items for different supermarkets during week 4, Appendix E was compiled. Due to a new reporting methodology, only prices for October 2012 will be reported and these will form a platform for future comparisons.

6. International food prices

The Food and Agricultural Organization (FAO) of the United Nations publishes their food price index on a monthly basis. The food price index consists of five commodity group price indices, namely the meat price index, the dairy price index, the cereals price index, the oils price index and the sugar price index. These indices are weighted with the average export shares of each of the groups for 2002 to 2004. In total, 55 commodity quotations, considered by FAO commodity specialists as representing the international prices of the noted food commodities, are included in the overall index. Figure 3 shows the overall food price index and the price indices for five food categories in real terms.

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Figure 3: Price indices for five food categories and international real food price index Source: FAO, 2012

On an annual basis, the FAO Food Price Index averaged 142.7 points in October 2012, 3 points (-2.3 %) down from the 146.1 points of October 2011. The decline was largely driven by a decrease in the meat, dairy, oils and sugar price indices. The cereal price index averaged 173.4 points in October 2012, 16.9 points (+10.8 %) up from the 156.5 index points of October 2011. A major decline was seen on the sugar price index, which decreased by 21.2 %, from 244.4 index points in October 2011 to 192.7 index points in October 2012. The oils/fats price index decreased by 9.1 %, from 151.8 index points in October 2011 to 138.0 index points in October 2012.

On a monthly basis, the food price index declined by 1.1 %, from 114.2 index points in September 2012 to 142.7 index points in October 2012. The decline was due to reduced international prices of cereals and oils/fats, which more than compensated for the increases in sugar and dairy prices.

The cereals price index decreased by 1.2 %, from 175.5 index points in September 2012 to 173.4 index points in October 2012. This was due to the decline in the wheat prices, as caused by the reduced global trade activity and the lower maize values which was due to the lower demand from the livestock (animal feed) and industrial (biofuels) sectors.

The oils price index decreased by 8.1 %, from 150.2 index points in September 2012 to 138.0 index points in October 2012. The decline was mainly due to the continued abundance in palm oil output from Southeast Asia, combined with the weak world import demand. There was higher than expected export availabilities of soy, rape and sunflower seed oil and a general slowdown in global consumption growth also contributed to the cooling of the market.

The meat price index decreased by 0.4 %, from 117.0 index points in September 2012 to 116.5 index points in September 2012. The international pork meat prices had stabilised, as strong gains in Europe and Brazil compensated for the fall in the US quotations. Prices in other meat markets remained close to their September levels, as pressure from rising feed costs was countered by sluggish import demand.

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The dairy price index increased by 3.4 %, from 125.5 index points in September 2012 to 129.7 index points in October 2012. All five dairy food product prices increased over the mentioned period.

The sugar price index increased by 1.6 %, from 189.6 index points in September 2012 to 192.7 index points in October 2012. The recent increase in sugar quotations reflected short-term export tightness in Brazil, the world’s largest sugar exporter, but prospects of large overall availabilities in the current 2012/13 marketing season limited the gain.

7. Estimated impact of food inflation on consumers

The purpose of this section is to illustrate the impact of food inflation on consumers. The analysis presented in the first part of this section is based on the cost of a basic food basket1 (as compiled by the Food Price Monitoring Committee in 2003), and determined by monthly average food price data for the period October 2011 to October 2012. From October 2011 to October 2012 the cost of this basic food basket increased by about R 43.42 (+10.6 %) in nominal terms, from R 412 to R 455 (compared to a lower increase of 8.1 % from July 2011 to July 2012).

The cost of this food basket, expressed as a share of the average monthly income2 of the poorest 30 % of the population, increased from 36.4 % in October 2011 to 40.2 % in October 2012. The cost of the food basket, expressed as a share of the average monthly income of the wealthiest 30 % of the population, increased from 2.9 % to 3.2 %.

Figure 4: The monthly cost of a typical consumer food basket for the period October 2011 to October 2012, expressed in

1 Composition of food basket: loaf of white bread (700 g), loaf of brown bread (700 g), super maize meal (5 kg), special maize meal (5 kg), rice (2 kg), tinned butter

beans (410 g), onions (1 kg), cabbage (1 kg), potatoes (1 kg), tomatoes (1 kg), apples (1 kg), bananas (1 kg), orange (1 kg), whole fresh chicken, stewing beef, long life full cream milk (1 l), extra large eggs (1.5 dozen), sunflower oil (750 ml), brick margarine (500 g), peanut butter (400 g), regular instant coffee (750 g) black/ceylon

tagless tea bags (62.5 g) and canned tuna (replacing canned pilchards due to data limitations) 2 The cost of the typical food basket was expressed as a share of estimated average monthly income of Income Deciles 1 to 3, the poorest 30 % of the population, as calculated from the STATSSA survey: ‘Income & Expenditure of households 2005/2006’ (calculations excludes imputed rent on owned dwelling)

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nominal terms and as share of the average income of the poorest 30 % of households (Income Deciles [ID] 1 to 3) and the wealthiest 30 % of households (ID 8 to 10).

To further explore the impact of inflation on consumers, Figure 5 presents an illustration of the average annual nominal cost of specific food groups within the basic food basket, for the period October 2011 to October 2012. As could be expected, Figure 5 illustrates the dominance of animal protein foods, as well as breads and cereals, in the cost of the basic food basket. Comparing October 2011 to October 2012 prices, all the food groups in this particular food basket was subjected to inflation, with the highest inflation in the following categories: bean products; bread and cereals; and animal protein foods. The various food groups in this food basket are discussed in more detail in Table 3.

Table 3: Overview of inflation contributing foods in the basic food basket, October 2011 to October 2012

Food group

Overall inflation rate Major contributors to inflation in this category

Minor contributors to inflation in this

category

Non-contributors to inflation in this

category

Comments

October 2011 vs.

October 2012

July 2011 vs.

July 2012

Animal protein

+13.2 % +6.7 % Canned tuna (+27.7 %) Whole fresh chicken (+12.8 %) Stewing beef (+11.6 %) Whole frozen chicken (+9.4 %)

None None Significant inflation on all protein food types

Bread and cereals

+16.5 % +17.2 % Special maize meal (+41.1 %) Super maize meal (+13.8 %) White bread (+9.4 %) Brown bread (+8.9 %)

Rice (+2.2 %) None Significant inflation on maize meal and bread – representing the most prominent staple food sources for households in South Africa

Vegetables +5.9 % -0.6 % Cabbage (+27.6 %) Tomatoes (+7.4 %)

Onions (+1.1 %)

Potatoes (-10.6)

Cabbage experienced significant inflation

Fruit +11.4 % +1.1 % Oranges (+41.5 %)

Apples (+5.7 %) Bananas (+3.4 %)

None High inflation on oranges in the basket

Dairy +8.7 % +10.7 % Milk (+8.7 %) None None Similar inflation on milk and eggs

Eggs +8.8 % +7.3 % Eggs (+8.8 %) None None

Fats and oils

+4.2 % +3.0 % None Margarine (+4.2 %) Sunflower oil (+4.2 %)

None Moderate inflation on margarine and sunflower oil

Bean products

+18.0 % +15.9 % Peanut butter (+23.7 %) Butter beans canned (+9.3 %)

None None Significant inflation, particularly on peanut butter

Coffee and tea

+2.4 % +7.0 % None Coffee (+2.9 %)

Ceylon/black tea (-1.1 %)

Inflation on coffee more prominent

Source: Stats SA, 2012 and own calculations

When comparing October 2011 to October 2012, a significant price inflation (8 % or more) was experienced for many important products in the food basket: oranges, special maize meal, tuna, cabbage, peanut butter, super maize meal, chicken, stewing beef, white bread, butter beans, brown bread, eggs and long life milk. This could have a negative impact on household food security in South Africa, affecting the affordability of important staple foods, as well as that of food items making a major contribution to dietary diversity. Furthermore, when comparing the inflation rates for October 2011 versus October 2012 with July 2011 versus July 2012 (i.e. the previous Food Price Monitor analysis period), inflation increased for most of the categories in this food basket.

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Figure 5: Nominal monthly cost of specific groups in the basic food basket, comparing October 2011 with October 2012

The impact of inflation on very poor consumers is further explored below, based on the typical portion sizes of very poor consumers of the five most widely consumed food items in South Africa, namely maize porridge, brown bread, sugar, tea and full cream milk (National Food Consumption Survey – Steyn & Labadarios, 20003; Oldewage-Theron et al, 20054). Figure 6 illustrates the estimated portion costs for these foods, calculated from the monthly food price data for October 2011 and October 2012. Similar to other FPM analysis periods, the significant cost contribution of maize meal and bread to the typical basic daily food selection of poor consumers are emphasised by the results in Figure 6. Furthermore, despite the relatively low actual food weight contribution of bread to this ‘food plate’, the bread component costs significantly more than the maize porridge component ( in this case, about 49 % more for October 2012). When comparing the costs associated with the typical portion sizes of very poor consumers for the five most widely consumed food items in South Africa, based on October 2012 versus October 2011 prices, the results in Figure 6 indicate an inflation of about 12.5 % (from R 3.51 to R 3.95 for the selection of portions). This was in particular due to inflation on maize meal, even though the inflation on bread and milk also contributed significantly. This analysis could be viewed as a simple measurement of the impact of food inflation on the poor. The results indicate that the current food inflation conditions have a more significant impact on very poor consumers (12.5 % inflation rate, comparing October 2012 versus October 2011), compared to the 'average' consumer's food basket (10.6 % inflation rate, as previously described).

3 Steyn, N.P., Labadarios, D. 2000. National Food Consumption Survey: Children aged 1-9 years, South Africa, 1999. Cape Town: The Department of Health

Directorate Nutrition. 4 Oldewage-Theron, W., Dicks, E. & Napier, C. 2005. Situation analysis of an informal settlement in the Vaal Triangle. Development Southern Africa. 22(1):13-26.

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Figure 6: Average nominal cost for the typical portions of the five food items most widely consumed by very poor consumers

in South Africa, for October 2011 and October 2012

8. December 2012 – February 2013 outlook

Food price inflation is on the rise and, for the outlook period, this trend is not anticipated to change. In fact, it is likely that the year-on-year food inflation rate will increase, as agricultural commodity prices remain high and the recent meaningful weakening of the exchange rate will drive other costs in the value chain, for instance transportation. Spiralling international commodity markets (due to the US drought) were hinted at as being the key driver for rising food prices in the past outlook report. Stats SA (P0141, 21 November) reports that the monthly increase of 2.8 % in the food index is the highest since August 1994. International agricultural commodity prices have come off their highs but are by no means at low levels, with average US gulf prices for wheat, maize and soybeans between 22 % to 30 % higher than a year ago.

International grain and oilseed prices are expected to remain relatively stagnant over the outlook period and decrease thereafter as US farmers are expected to expand the area under production under the assumption of normal weather. Therefore, key drivers for food inflation in this report will shift to local economic indicators, like the exchange rate and consumer-spending over the festive season, as well as key underlying fundamentals in the South African grain, livestock and horticultural markets. Weather patterns over the next three months will be a key driver for all summer grain prices. Maize prices are currently trading closer to export parity levels and therefore have significant upward potential if weather conditions are not favourable. Currently, the western parts of the

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Free State and the North West provinces have received very little rain and, if no significant rainfall is recorded in the next week or two, a ‚weather market‛ will be traded on SAFEX with maize, sunflower and soybean prices trending upwards.

The weaker exchange rate has already influenced all commodities and food items that are either being imported or exported. Typical examples are wheat and chicken meat prices that are increasing on the back of higher import parity prices, and prices of fruits that are increasing as a consequence of higher export realisations. Chicken prices (and all other types of meat) are supported by very high world meat prices, as was forecasted in the previous report. Expensive feed is driving local beef prices. Beef prices temporarily increased by as much as 38 % in October, but weakened again to trade around levels of R 32/kg. Meat prices typically trade higher over the festive season.

In conclusion, a festive season of high food prices will be a stark reminder of the importance to support the local agricultural industry.

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APPENDIX A: DATA ON URBAN FOOD PRICE TRENDS

Table A.1: Wheat products

Wheat products Price level Percentage change

Oct-11 Jul-12 Oct-12 July-12 to Oct-12 Oct-11 to Oct-12

Loaf of brown bread 700 g 8.08 8.25 8.80 6.67 % 8.91 %

Loaf of white bread 700 g 9.03 9.34 9.88 5.78 % 9.41 %

Cake flour 2.5 kg 18.56 18.20 20.88 14.73 % 12.50 %

Spaghetti 500 g 8.79 9.12 9.76 7.02 % 11.04 %

Macaroni plain 500 g* 8.21 8.32 9.25 11.13 % 12.67 %

Average

9.06 % 10.91 %

Wheat (R/ton) 2908.21 3396.00 3561.01 4.86 % 22.45 %

*Data from AC Nielsen

Table A.2: Maize products

Maize products Price level Percentage change


Maize special 5 kg* 20.26 25.93 28.59 10.24 % 41.09 %

Maize super 5 kg* 26.99 28.75 30.72 6.82 % 13.80 %

Average

8.53 % 27.45 %

White Maize (R/ton) 2178.14 2539.55 2461.94 -3.06 % 36.98 %


Table A.3: Sunflower products

Sunflower products Price level Percentage change


Sunflower oil 750 ml 16.01 16.67 16.69 0.12 % 4.25 %

Medium fat spread 1 kg tub* 19.42 24.00 22.29 -7.12 % 14.80 %

Brick margarine 500 g 15.75 16.30 16.41 0.67 % 4.19 %

Average

-2.11 % 7.75 %

Sunflower (R/ton) 4088.21 5059.82 5936.56 17.33 % 47.67 %


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Table A.4: Processed vegetables

Processed vegetables Price level Percentage change


Butter beans - tinned 410 g 11.23 11.87 12.27 3.37 % 9.26 %

Chopped peeled tomato 410 g* 11.49 11.70 12.36 5.65 % 7.56 %

Tomato & onion mix 410 g* 9.32 9.33 10.39 11.28 % 11.40 %

Canned peas 410 g* 8.93 9.04 9.56 5.77 % 7.06 %

Baby carrots 1 kg* 31.62 34.15 35.04 2.59 % 10.80 %

Green peas 1 kg* 27.85 29.63 29.99 1.22 % 7.68 %

Sliced beans 1 kg* 29.06 31.49 0.00 -100.00 % -100.00 %

Super juicy corn 1 kg* 29.46 31.18 26.32 -15.57 % -10.65 %

Average

-10.71 % -7.11 %


Table A.5: Fresh vegetables

Fresh vegetables Price level Percentage change


Carrots – fresh per kg 12.13 11.98 11.88 -0.83 % -2.06 %

Onions – fresh per kg 8.70 8.47 8.80 3.90 % 1.15 %

Potatoes – fresh per kg 9.86 8.82 8.81 -0.11 % -10.65 %

Tomatoes – fresh per kg 18.57 14.23 19.95 40.20 % 7.43 %

Sweet potatoes – fresh per kg 13.71 11.04 15.63 41.58 % 14.00 %

Cabbages – fresh per kg 8.14 10.47 10.39 -0.76 % 27.64 %

Lettuces – fresh per kg 28.15 39.86 41.94 5.22 % 48.99 %

Pumpkins – fresh per kg 15.10 13.51 15.66 15.91 % 3.71 %

Cauliflowers – fresh per kg 25.90 27.32 30.35 11.09 % 17.18 %

Average

12.91 % 11.93 %

Table A.6: Processed meat

Processed meat

Price level Percentage change


Meatballs in gravy 400 g* 14.27 16.51 16.46 -0.30 % 15.33 %

Picnic ham 300 g* 27.70 27.72 31.18 12.48 % 12.58 %

Pork sausage per kg 57.85 57.47 61.66 7.29 % 6.59 %

Polony per kg 28.81 28.59 28.59 0.00 % -0.76 %

Average

4.87 % 8.43 %


15


Table A.7: Unprocessed meat

Unprocessed meat

Price level Percentage change


Pork Chops – Fresh per kg 55.41 53.95 53.69 -0.48 % -3.10 %

Lamb – Fresh per kg 97.21 91.53 92.37 0.92 % -4.98 %

Beef Brisket – Fresh per kg 54.94 54.24 60.19 10.97 % 9.56 %

Beef Chuck – Fresh per kg 55.83 55.20 62.33 12.92 % 11.64 %

Beef Mince – Fresh per kg 56.85 57.32 62.71 9.40 % 10.31 %

Beef Rump Steak –Fresh per kg 86.14 87.28 97.24 11.41 % 12.89 %

Beef T-Bone – Fresh per kg 73.03 72.07 77.54 7.59 % 6.18 %

Whole Chicken – Fresh per kg 30.11 30.85 33.96 10.08 % 12.79 %

Chicken Portions – Fresh per kg 39.79 41.24 44.19 7.15 % 11.06 %

Average

7.77 % 7.37 %

Table A.8: Dairy products

Dairy product Price level Percentage change


Fresh milk full cream 1 l sachet* 6.69 7.50 7.48 -0.24 % 11.78 %

Fresh milk full cream 2 l* 15.45 17.37 17.74 2.15 % 14.86 %

Fresh milk low fat 1 l sachet* 6.42 7.67 7.82 2.04 % 21.88 %

Fresh milk low fat 2 l* 15.72 18.16 18.20 0.24 % 15.80 %

Long life milk full cream 1 l* 9.62 10.57 10.45 -1.10 % 8.70 %

Skimmed powder milk 1 kg* 65.50 69.77 74.26 6.43 % 13.36 %

Total butter 500 g* 27.85 31.51 29.67 -5.83 % 6.52 %

Cheddar cheese per kg 88.87 94.33 96.41 2.21 % 8.48 %

Average

0.74 % 12.67 %


Table A.9: Fruits

Fruits Price level Percentage change


Apples – fresh per kg 12.91 12.62 13.65 8.16 % 5.73 %

Bananas – fresh per kg 10.34 10.77 10.69 -0.74 % 3.38 %

Oranges – fresh per kg 5.21 5.26 7.37 40.11 % 41.46 %

Average

15.84 % 16.86 %

16


Table A.10: Fish products

Fishes – tinned Price level Percentage change


Fish (excl tuna) – tinned 155 g 6.37 6.87 6.97 1.46 % 9.42 %

Fish (excl tuna) – tinned 425 g 11.23 12.11 12.17 0.50 % 8.37 %

Tuna – tinned 170 g 9.93 11.89 12.68 6.64 % 27.69 %

Average

2.87 % 15.16 %

Table A.11: Other products

Other products Price level Percentage change


King Korn 1 kg* 11.37 13.93 14.17 1.70 % 24.60 %

White Sugar 2.5 kg 22.41 23.22 23.31 0.39 % 4.02 %

Rice 2 kg 20.78 21.12 21.23 0.52 % 2.17 %

Ricoffy Reg 750 g* 56.73 56.04 57.34 2.31 % 1.07 %

Ceylon/Black Tea 62.5 g 7.51 7.67 7.43 -3.13 % -1.07 %

Imana Soya Mince Tomato & Onion 200 g* 9.67 10.61 9.69 -8.66 % 0.21 %

Eggs 1.5 dozen 24.83 26.72 27.01 1.09 % 8.78 %

Average

-0.83 % 5.68 %


17


APPENDIX B: SUMMARY OF INFLATION FOR SELECTED FOOD ITEMS BETWEEN OCTOBER 2011 AND OCTOBER 2012

Table B.1: Food items in the urban areas ranked according to price changes (October 2011 to October 2012)

Grain and grain products %

Meat and meat products and dairy and dairy products

% Fresh and processed fruits and

vegetables %

Ceylon/Black Tea 62.5 g -1.07 % Lamb – Fresh per kg -4.98 % Potatoes Bag 10 kg -10.65 %

Soya Mince Tomato & Onion 200 g* 0.21 % Pork Chops – Fresh per kg -3.10 % Super Juicy Corn 1 kg* -10.65 %

Coffee Reg 750 g* 1.07 % Polony per kg -0.76 % Carrots – Fresh per kg -2.06 %

Rice 2 kg 2.17 % Beef T-Bone – Fresh per kg 6.18 % Onions – Fresh per kg 1.15 %

White Sugar 2.5 kg 4.02 % Total Butter 500 g* 6.52 % Bananas – Fresh per kg 3.38 %

Brick Margarine 500 g 4.19 % Pork Sausage per kg 6.59 % Pumpkin – Fresh per kg 3.71 %

Sunflower Oil 750 ml 4.25 % Fish (Excl Tuna) – Tinned 425 g 8.37 % Apples – Fresh per kg 5.73 %

Loaf Of Brown Bread 700 g 8.91 % Cheddar Cheese per kg 8.48 % Canned Peas 410 g* 7.06 %

Loaf Of White Bread 700 g 9.41 % Long Life Milk Full Cream 1 l* 8.70 % Tomatoes – Fresh per kg 7.43 %

Spaghetti 500 g 11.04 % Eggs 1.5 dozen 8.78 % Chopped Peeled Tomato 410 g* 7.56 %

Cake Flour 2.5 kg 12.50 % Whole Chicken – Frozen per kg 9.41 % Green Peas 1 kg* 7.68 %

Macaroni Plain 500 g* 12.67 % Fish (Excl Tuna) – Tinned 155 g 9.42 % Butter – - Tinned 410 g 9.26 %

Maize Super 5 kg* 13.80 % Beef Brisket – Fresh per kg 9.56 % Baby Carrots 1kg* 10.80 %

Medium Fat Spread 1 kg tub* 14.80 % Beef Mince – Fresh per kg 10.31 % Tomato & Onion Mix 410g* 11.40 %

King Korn 1 kg* 24.60 % Chicken Portions – Fresh per kg 11.06 % Sweet Potatoes – Fresh per kg 14.00 %

Maize Special 5 kg* 41.09 % Beef Chuck – Fresh per kg 11.64 % Cauliflower – Fresh per kg 17.18 %

Chicken Portions – Frozen per kg 11.66 % Cabbage – Fresh per kg 27.64 %

Fresh Milk Full Cream 1 l sachet* 11.78 % Oranges – Fresh per kg 41.46 %

Enterprise Picnic Ham 300 g* 12.58 % Lettuce – Fresh per kg 48.99 %

Whole Chicken – Fresh per kg 12.79 %

Beef Rump Steak – Fresh per kg 12.89 %

Skimmed Powder Milk 1 kg* 13.36 %

Fresh Milk Full Cream 2 l* 14.86 %

Bull Brand Meatballs in Gravy 400 g* 15.33 %

Fresh Milk Low Fat 2 l* 15.80 %

Fresh Milk Low Fat 1 l sachet* 21.88 %

Tuna – Tinned 170 g 27.69 %

* Data from AC Nielsen ** Food items highlighted in the table above experienced price increases above the South African Reserve Bank’s (SARB) inflation target of 6 %

18


APPENDIX C: COMMODITY AND PRODUCT PRICE TRENDS

C.1 Wheat price trends

Figure C.1: Domestic market price of wheat against global market price Source: FAO and SAFEX

Figure C.2: Import parity, export parity and domestic prices of wheat Source: SAGIS and SAFEX

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Wheat (US No.2, Hard Red Winter ord. Prot, US Fob Gulf (Tuesday))

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Between October 2011 and October 2012: International wheat price ↑50.66 % Domestic price of wheat ↑22.45 %

Domestic wheat price followed the import parity price of wheat closely, because SA is a net importer of wheat. Between October 2011 and October 2012: Wheat import parity price ↑ 44.82 % Wheat export parity price ↑ 93.29 %

19


Figure C.3: Domestic market wheat price and bread price trends Source: Stats SA and SAFEX

C.2 Maize price trends

Figure C.4: Domestic market price of maize against global market price Source: FAO and SAFEX

Figure C.5: Import parity, export parity and domestic prices of maize Source: SAFEX and SAGIS

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Loaf of brown bread 700g Loaf of white bread 700g Domestic price of wheat

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Domestic price of yellow maize Maize (US No.2, Yellow, U.S. Gulf (Friday))

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Domestic price of yellow maize Import parity price of maize Export parity price of maize

Between October 2011 and October 2012: Domestic wheat price ↑ 22.45 % Brown bread price ↑ 8.91 %

White bread price ↑ 9.41 %

Between October 2011 and October 2012: International price of maize ↑ 20.10 % Domestic price of yellow maize ↑ 16.61 %

Between October 2011 and October 2012: Export parity price ↑ 39.59 % Import parity price ↑ 27.60 %

20


Figure C.6: Maize price and maize meal price trends Source: SAFEX and AC Nielsen

C.3 Sunflower seeds price trends

Figure C.7: Domestic market price of sunflower seeds against global market price Source: FAO and SAFEX

Figure C.8: Sunflower seeds price and sunflower oil price trends Source: SAFEX and Stats SA

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Between October 2011 and October 2012: Super maize meal price ↑ 16.20 % Special maize meal ↑ 41.09 % Domestic price of white maize ↑ 13.03 %

Between October 2011 and October 2012: Domestic price of sunflower seeds ↑ 45.21 %

Between October 2011 and October 2012 the international price of sunflower seeds ↑ 29.20 %

Between October 2011 and October 2012: Sunflower seed price ↑45.21 %

Average retail sunflower oil price ↑ 5.84 %

21


C.4 Dairy price trends

Figure C.9: Skim milk powder and whole milk powder price trends Source: FAO

Figure C.10: Domestic producer price and retail prices of milk Source: MPO and AC Nielsen

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Dairy_Whole Milk Powder (Oceania, indicative export prices, f.o.b.)

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Fresh milk full cream 1ℓ* Fresh milk low fat 1ℓ* Milk producer price

Between October 2011 and October 2012: Skim milk powder ↑1.61 %

Whole milk powder ↓ 5.04 %

Between October 2011 and October 2012: Milk producer price ↑ 13.18 % Full cream milk price ↑ 10.79 %

22


C.5 Meat price trends

Figure C.11: Retail prices of beef, pork chops, chicken portions, whole chicken and lamb

Source: Stats SA

Figure C.12: Producer prices of chicken and pork Source: AMT

Figure C.13: Producer prices of beef and lamb Source: AMT

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Beef brisket - fresh per kg Beef chuck - fresh per kg

Beef mince - fresh per kg Beef rump steak -fresh per kg

Beef t-bone - fresh per kg

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Chicken portions - fresh per kg Lamb - fresh per kg Pork chops - fresh per kg

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Chicken- Frozen (R/kg) Chicken-Fresh (R/kg)

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Pork Porker (R/kg) Pork Baconer (R/kg)

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Beef Class A2/A3 (R/kg) Beef Class B2/B3 (R/kg)

Beef Class C2/C3 (R/kg)

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Lamb Class A2/A3 Lamb Class B

Lamb Class C2/C3

The price of beef at retail level showed an average increase of 10.11 % for the different cuts. Frozen chicken portions price ↑ by 11.66 % per kilogram

Between October 2011 and October 2012: Producer price for fresh chicken ↑ 9.43 % Frozen chicken price ↑ 26.18 % Porker price ↑11.44 % Baconer price ↑8.40 %

Between October2011 and October 2012:

Producer price of Beef-class A2/A3 ↑ 7.64 %

Prices of beef class B2/B3 ↑ 0.82 % and class C2/C3↑2.17 %

Prices of lamb-class A2/A3 and class B ↓ 10.73 % and ↓ 15.44 % respectively; prices of class C2/C3 ↓ 12.09 %

23


APPENDIX D: REAL FARM TO RETAIL PRICES SPREAD AND FARM VALUE SHARE OF STAPLE FOOD ITEMS

D.1 Brown bread real farm-to-retail price spread and farm value share

Figure D.1: Real farm to retail price spread and real farm value share of brown bread. Source: SAFEX, Stats SA and own calculations

D.2 White bread real farm-to-retail price spread and farm value share

Figure D.2: Real farm to retail price spread and real farm value share of white bread. Source: SAFEX, AC Nielsen and own calculations

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Real Farm Value Share White Bread (700g)

Between October 2011 and October 2012 The real farm-to-retail price spread of white bread ↑ 2.33 % The real farm value share of white bread ↓ 14.34 %

Between October 2011 and October 2012 The real farm-to-retail price spread of brown bread ↑ 12.17 % The real farm value share of brown bread ↓ 21.75 %

24


D.3 Super maize meal real farm to retail price spread and farm value share

Figure D.3: Real farm to retail price spread and real farm value share of super maize meal. Source: SAFEX, AC Nielsen and own calculations

D.4 Special maize meal real farm to retail price spread and farm value share

Figure D.4: Real farm to retail price spread and real farm value share of special maize meal. Source: SAFEX, AC Nielsen and own calculations

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1

Jul-

11

Oct

-11

Jan

-12

Ap

r-1

2

Jul-

12

Oct

-12

Re

al F

arm

Val

ue

Sh

are

(%

)

Re

al F

TRP

S (R

/to

n)

Real FTRPS Super Maize Meal

Real Farm Value Share Super Maize Meal

0

20

40

60

80

100

0

500

1000

1500

2000

2500

3000

Jan

-08

Ap

r-0

8

Jul-

08

Oct

-08

Jan

-09

Ap

r-0

9

Jul-

09

Oct

-09

Jan

-10

Ap

r-1

0

Jul-

10

Oct

-10

Jan

-11

Ap

r-1

1

Jul-

11

Oct

-11

Jan

-12

Ap

r-1

2

Jul-

12

Oct

-12

Re

al F

arm

Val

ue

Sh

are

(%

)

Re

al F

TRP

S (R

/to

n)

Real FTRPS Special Maize meal

Real Farm Value Share Special Maize Meal

Between October 2011 and October 2012 The real farm-to-retail price spread of super maize meal ↑ 3.51 % The real farm value share of super maize meal ↑ 4.31 %

Between October 2011 and October 2012 The real farm-to-retail price spread of special maize meal ↑ 56.73 % The real farm value share of special maize meal ↓ 16.51 %

25


APPENDIX E: DATA ON DIFFERENT SUPERMARKETS PRICE TRENDS (WEEK 4 OF MONTH OF OCTOBER)

Table E1: Price data different supermarkets in the Eastern Cape Province

Products Eastern Cape Province

Retailer A Retailer B Retailer C Retailer D

Cheapest Chicken Braaicuts 2 kg 44.99 34.99 34.99 57.95

Cheapest Maize Meal 5 kg 23.99 25.49 23.99 34.95

Long Life Uht 1 l 9.79 10.29 10.49 10.25

Ceylon Teabags Tagless 100s 19.99 21.99 23.99 22.95

Sunflower Oil 2 l 35.99 29.99 35.99 27.95

Margarine Brick 500 g 18.95 19.49 18.99 18.99

White Sugar 2.5 kg 21.99 25.99 21.99 23.95

Rice 2 kg 23.99 21.99 23.99 23.95

Apples/kg 16.99 16.99 16.99 17.99

Cabbage each 6.49 6.99 4.99 No data

Onions 2 kg 19.99 21.99 15.99 25.99

Potatoes/kg 7.99 9.99 6.99 7.99

Tomatoes/kg 21.99 21.99 18.99 19.99

Banana No data No data No data No data

Table E2: Price data different supermarkets in the Free State Province

Products Free State Province




Long Life Uht 1 l 9.79 10.99 9.99 10.25


Sunflower Oil 2 l 34.99 29.99 29.99 27.95


White Sugar 2.5 kg 23.99 22.49 18.99 23.95

Rice 2 kg 18.99 21.29 18.99 23.95

Apples/kg No data No data No data No data

Bananas /kg No data No data No data No data

Cabbage each No data No data No data No data

Onions 2 kg No data No data No data No data

Potatoes/kg No data No data No data No data

Tomatoes/kg No data No data No data No data

26


Table E3: Price data different supermarkets in the Gauteng Province

Products Gauteng Province




Long Life Uht 1 l 9.89 10.99 9.99 10.25


Sunflower Oil 2 l 33.99 29.99 29.79 27.95


White Sugar 2.5 kg 24.39 19.89 24.39 23.95

Rice 2 kg 19.99 25.49 19.99 23.95

Apples/kg 18.99 16.99 18.99 19.99

Bananas /kg 9.99 7.99 8.99 8.99

Cabbage each 8.99 7.99 7.99 10.00

Onions 2 kg 17.99 16.99 No data 25.99

Potatoes/kg 8.99 7.99 9.99 9.99

Tomatoes/kg 19.99 17.99 19.99 19.99

Table E4: Price data different supermarkets in KwaZulu Natal Province

Products KwaZulu Natal Province




Long Life Uht 1 l 10.99 10.99 10.99 No data


Sunflower Oil 2 l 36.99 29.99 36.99 27.95


White Sugar 2.5 kg 21.99 19.89 21.99 16.99

Rice 2 kg 19.99 17.39 19.99 23.95

Apples/kg 14.99 16.99 14.99 19.99

Bananas /kg 8.99 7.99 8.99 7.99

Cabbage each 7.99 6.66 4.99 10.00

Onions 2 kg 19.99 16.99 15.99 25.99

Potatoes/kg 9.99 9.99 9.99 9.99

Tomatoes/kg 17.99 18.99 17.99 19.99

27


Table E5: Price data different supermarkets in the Western Cape Province

Products Western Cape Province




Long Life Uht 1 l 8.99 9.99 9.99 No data


Sunflower Oil 2 l 29.95 29.99 36.75 27.95


White Sugar 2.5 kg 19.99 22.39 22.99 23.95

Rice 2 kg 24.95 21.29 24.95 23.95

Apples/kg 16.99 16.99 16.99 17.99

Bananas /kg 9.99 8.99 9.99 9.99

Cabbage each 8.99 6.66 9.99 10.00

Onions 2 kg No data 18.99 No data 25.99

Potatoes/kg 7.99 6.99 7.99 7.99

Tomatoes/kg 22.99 19.99 22.99 19.99

Source: Adcheck, 2012

28


APPENDIX F: DATA COLLECTION

Urban food prices reported by in this media release are obtained from Statistics South Africa (Stats SA) and AC Nielsen. These prices obtained from these two sources are regarded as being representative of changes in food prices in South Africa due to:

Stats SA price data on all products are sampled from approximately 800 different data collections points across the country on a monthly basis. Food price data is not collected from all the data collection points since some stores that are sampled do not necessarily sell food. In addition, certain food prices are not sampled in all provinces. For example, the price of cheddar cheese is collected from Gauteng, Western Cape, Eastern Cape, KwaZulu-Natal, Free State, Northern Cape, North West and Mpumalanga. Food price data collection by Stats SA also involves field work where price collectors visit stores to collect data, after which such data undergoes a rigorous process to ensure the integrity of the data. The basket of food products that are included was derived from the Income and Expenditure Survey of 2005/06 that was compiled by Stats SA to ensure that the basket is representative of consumer spending on food. For more detailed information on the methodological process involved in the collection of prices visit http://www.statssa.gov.za/cpi/documents /CPI_Sources_Methods.pdf.

AC Nielsen collects food price data on a monthly basis from approximately 1000 large food chain stores across the country. Food prices are collected through scanners at the tellers in the big food chain stores after which it undergoes a rigorous process to ensure the integrity of the data. As is the case for Stats SA not all prices are collected in all provinces. For example, potato prices are collected from the core urban areas of Gauteng, KwaZulu-Natal, Eastern Cape, Western Cape and Free State provinces.

http://www.statssa.gov.za/cpi/documents%20/CPI_Sources_Methods.pdf



29


Compiled by: Price trends and discussion on selected topics: Outlook: Londiwe Thabethe Ferdi Meyer Hester Vermeulen Christo Joubert Heidi Phahlane

Enquiries: Ronald Ramabulana: 012 341-1115 Stats SA, AC Nielsen and the rural food price monitoring respondents are acknowledged for assistance provided to the NAMC in terms of food price data. © 2012. Published by National Agricultural Marketing Council (NAMC). Disclaimer: Information contained in this document results from research funded wholly or in part by the NAMC acting in good faith. Opinions, attitudes and points of view expressed herein do not necessarily reflect the official position or policies of the NAMC. The NAMC makes no claims, promises, or guarantees about the accuracy, completeness, or adequacy of the contents of this document and expressly disclaims liability for errors and omissions regarding the content thereof. No warranty of any kind, implied, expressed, or statutory, including but not limited to the warranties of non-infringement of third party rights, title, merchantability, fitness for a particular purpose or freedom from computer virus is given with respect to the contents of this document in hardcopy, electronic format or electronic links thereto. Reference made to any specific product, process, and service by trade name, trade mark, manufacturer or another commercial commodity or entity are for informational purposes only and do not constitute or imply approval, endorsement or favouring by the NAMC.

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