MEDIA RELEASE FOOD PRICE MONITOR: November 2012

Transcription

1 MEDIA RELEASE FOOD PRICE MONITOR: EXECUTIVE SUMMARY The October 212 Consumer Price Index (CPI) released by Statistics South Africa (Stats SA) showed that the headline CPI was 5.6 % between October 211 and October 212. The previous Food Price Monitor (FPM) of August 212 reported that the food and non-alcoholic beverage index increased by 5.3 % between July 211 and July 212. 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 212 and 5.8 % in September 212. Inflation on food and non-alcoholic beverages gained momentum in October 212 to 6.3 %. At retail level, urban consumers paid R 8.8 for a 7g loaf of brown bread and R 9.88 for a 7g loaf of white bread during the month of October 212, indicating an 8.91 % and 9.41 % increase, respectively, compared to October 211. During October 212, the real farm-to-retail-price-spread for brown bread was R 7.82 and for white bread R 7.8, indicating a % 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 212 versus October 211 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 212 with October 211), compared to the 'average' consumer's food basket (1.6 % inflation rate, as previously described). NATIONAL AGRICULTURAL MARKETING COUNCIL Business Office Block A. 4 th Floor. Meintjiesplein Building. 536 Francis Baard Street. Arcadia. Pretoria. 2 Private Bag, X935, Pretoria, 1 Tel: Fax: /1811

2 CPI 1. Foreword The October 212 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 211 and October 212. The headline CPI was 5.6 % between October 211 and October 212. The previous Food Price Monitor (FPM) of August 212 reported that the food and non-alcoholic beverage index increased by 5.3 % between July 211 and July 212. Since the last report, the food and non-alcoholic beverage inflation slowed down on a year-on-year basis by 4.9 % in August 212 and 5.8 % in September 212. Figure 1 shows the year-on-year headline and the food and non-alcoholic beverage inflation rates from October 211 to October 212. 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 (.8 %), oils and fats (.8 %), milk, eggs and cheese (.7 %) and hot beverages (.3 %). The price of cold beverages decreased by.2 %. On an annual basis, the price of milk, eggs and cheese increased by 8.4 % from October 211 to October 212, 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 211 and October 212. Figure 2 shows the year-on-year percentage change of the price indices for the different food groups Headline CPI Food and non-alcoholic beverages Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Figure 1: Headline CPI and food and non-alcoholic beverage CPI for (year-on-year) Source: Stats SA, 212 3

3 Percenatge change Milk, eggs and cheese Bread and cereals Other food Meat Fish Processed Unprocessed Fruit Sugar and sweets Oils and fats Vegetables Oct 211- Oct 212 Sept 212 -Oct Figure 2: Year-on-year percentage change for different food categories (October 211 October 212) Source: Stats SA, 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 212. 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.1 %. The overall inflation for China in July 212 was 1.8 % compared to the 1.7 % in October 212. Food inflation for July 212 was 2.4 % as compared to the 1.8 % value in October 212. 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 212 Country Overall inflation ( %) Inflation on food and non alcoholic beverages ( %) South Africa Botswana Zambia Turkey Namibia United States United Kingdom Brazil Russia India China Source: Central banks and statistics reporting institutions of these countries, as well as the press 4

4 3. Urban and rural food price trends: October 211 October 212 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 212 and October 212, 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, 5g (6.52 %); pork sausage, 1kg (6.59 %); canned peas, 41g (7.6 %); fresh tomatoes, 1kg (7.43 %); chopped peeled tomatoes, 41g (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 (8.7 %); eggs, 1.5 dozen (8.78 %); loaf of brown bread, 7g (8.91 %); tinned butter beans, 41g (9.26 %); loaf of white bread, 7g (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 (1.31 %), baby carrots, 1kg (1.8 %); spaghetti, 5g (11.4 %); fresh chicken portions, 1kg (11.6 %); tomato & onion mix, 41g (11.4 %); fresh beef chuck, 1kg (11.64 %); frozen chicken portions, 1kg (11.66 %); fresh full cream milk, 1l sachet (11.78 %); cake flour 2.5kg (12.5 %); enterprise picnic ham 3g (12.58 %); plain macaroni, 5g (12.67 %); fresh whole chicken, 1kg (12.79 %); fresh beef rump steak, 1kg (12.89 %); skimmed powder milk, 1kg (13.36 %); super maize, 5kg (13.8 %); fresh sweet potatoes, 1kg (14. %); medium fat spread, 1kg tub (14.8 %); fresh full cream milk, 2l (14.86 %); bull brand meatballs in gravy, 4g (15.33 %); fresh low fat milk, 2l (15.8 %); fresh cauliflower, 1kg (17.18 %); fresh low fat milk, 1l sachet (21.88 %); king korn, 1kg (24.6 %); fresh cabbage, 1kg (27.64 %); tinned tuna, 17g (27.69 %); maize special, 5kg (41.9 %); 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 5.66 % while its domestic price increased by % from October 211 to October 212. At retail level, urban consumers paid R 8.8 for a 7g loaf of brown bread and R 9.88 for a 7g loaf of white bread during the month of October 212, indicating an 8.91 % and 9.41 % increase, respectively, compared to October 211. During October 212, the real farm-to-retail-price-spread for brown bread was R 7.82 and for white bread R 7.8, indicating a % and 2.33 % increase, respectively. The international price of yellow maize (US No.2, Yellow, U.S. Gulf) increased by 2.1 % between October 211 and October 212. However, on a month-to-month basis (September 212 to October 212), 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 %. The domestic price of yellow maize traded at an average of R per ton during the month of October 212.he domestic white maize price increased by 13.3 % compared to October 211. At the retail level, urban consumers paid 13.8 % more for a super maize meal (5kg) and 41.9 % more for special maize meal (5kg) in October 212, compared to October 211. The price of 5kg super maize meal and 5kg special maize meal increased from R to R 3.72 and R to R 28.59, respectively, between October 211 and October

5 The sunflower seed price traded at R per ton in October 212. On an annual basis, the price of sunflower seed increased by % between October 211 and October 212. In urban areas, the price of sunflower cooking oil (75ml) increased by 4.25 %. The international sunflower price increased by 29.2 % between October 211 and October 212. The annual increase in retail price of beef cuts ranged from 6.18 % for beef t-bone per kg to % for fresh beef rump steak per kg. Fresh lamb per kg showed an annual price decrease of 4.98 % between October 211 and October 212 at retail level. The retail price of whole fresh chicken and whole frozen chicken increased by % 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 212 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 22 to 24. 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. 6

6 Index (22-24 = 1) 1/21 5/21 9/21 1/211 5/211 9/211 1/212 5/212 9/212 Index (22-24 = 1) Meat Price Index Cereals Price Index Sugar Price Index Dairy Price Index Oils Price Index 1. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Figure 3: Price indices for five food categories and international real food price index Source: FAO, 212 On an annual basis, the FAO Food Price Index averaged points in October 212, 3 points (-2.3 %) down from the points of October 211. The decline was largely driven by a decrease in the meat, dairy, oils and sugar price indices. The cereal price index averaged points in October 212, 16.9 points (+1.8 %) up from the index points of October 211. A major decline was seen on the sugar price index, which decreased by 21.2 %, from index points in October 211 to index points in October 212. The oils/fats price index decreased by 9.1 %, from index points in October 211 to 138. index points in October 212. On a monthly basis, the food price index declined by 1.1 %, from index points in September 212 to index points in October 212. 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 index points in September 212 to index points in October 212. 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 15.2 index points in September 212 to 138. index points in October 212. 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.4 %, from 117. index points in September 212 to index points in September 212. 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. 7

7 Nominal food basket cost (R) Oct-11 Nov-11 Dec-11 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Aug-12 Sep-12 Oct-12 Estimated share of income (%) The dairy price index increased by 3.4 %, from index points in September 212 to index points in October 212. All five dairy food product prices increased over the mentioned period. The sugar price index increased by 1.6 %, from index points in September 212 to index points in October 212. 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 212/13 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 basket 1 (as compiled by the Food Price Monitoring Committee in 23), and determined by monthly average food price data for the period October 211 to October 212. From October 211 to October 212 the cost of this basic food basket increased by about R (+1.6 %) in nominal terms, from R 412 to R 455 (compared to a lower increase of 8.1 % from July 211 to July 212). The cost of this food basket, expressed as a share of the average monthly income 2 of the poorest 3 % of the population, increased from 36.4 % in October 211 to 4.2 % in October 212. The cost of the food basket, expressed as a share of the average monthly income of the wealthiest 3 % of the population, increased from 2.9 % to 3.2 % % 4% 35% 3% 25% 2% 15% 1% 5% % Total nominal basket cost Share of income ID1-3 Share of income ID8-1 Figure 4: The monthly cost of a typical consumer food basket for the period October 211 to October 212, expressed in 1 Composition of food basket: loaf of white bread (7 g), loaf of brown bread (7 g), super maize meal (5 kg), special maize meal (5 kg), rice (2 kg), tinned butter beans (41 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 (75 ml), brick margarine (5 g), peanut butter (4 g), regular instant coffee (75 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 3 % of the population, as calculated from the STATSSA survey: Income & Expenditure of households 25/26 (calculations excludes imputed rent on owned dwelling) 8

8 nominal terms and as share of the average income of the poorest 3 % of households (Income Deciles [ID] 1 to 3) and the wealthiest 3 % of households (ID 8 to 1). 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 211 to October 212. 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 211 to October 212 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 211 to October 212 Food group Overall inflation rate Major contributors to inflation in this category Animal protein Bread and cereals October 211 vs. October 212 July 211 vs. July % +6.7 % Canned tuna (+27.7 %) Whole fresh chicken (+12.8 %) Stewing beef (+11.6 %) Whole frozen chicken (+9.4 %) % % Special maize meal (+41.1 %) Super maize meal (+13.8 %) White bread (+9.4 %) Brown bread (+8.9 %) Minor contributors to inflation in this category Vegetables +5.9 % -.6 % Cabbage (+27.6 %) Tomatoes (+7.4 %) Fruit % +1.1 % Oranges (+41.5 %) Apples (+5.7 %) None Bananas (+3.4 %) Dairy +8.7 % +1.7 % Milk (+8.7 %) None None Eggs +8.8 % +7.3 % Eggs (+8.8 %) None None Fats and +4.2 % +3. % None Margarine (+4.2 %) None oils Sunflower oil (+4.2 Noncontributors to inflation in this category Comments None None Significant inflation on all protein food types Rice (+2.2 %) None Significant inflation on maize meal and bread representing the most prominent staple food sources for households in South Africa Onions (+1.1 %) Potatoes (-1.6) Cabbage experienced significant inflation High inflation on oranges in the basket Similar inflation on milk and eggs Moderate inflation on margarine and sunflower oil %) Bean +18. % % Peanut butter (+23.7 %) None None Significant inflation, particularly on products Butter beans canned (+9.3 %) peanut butter Coffee and +2.4 % +7. % None Coffee (+2.9 %) Ceylon/black Inflation on coffee more prominent tea tea (-1.1 %) Source: Stats SA, 212 and own calculations When comparing October 211 to October 212, 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 211 versus October 212 with July 211 versus July 212 (i.e. the previous Food Price Monitor analysis period), inflation increased for most of the categories in this food basket. 9

9 Nominal cost of food groups in basic food basket (R) Animal protein Bread & Cereals Coffee & Tea Vegetables Dairy & Eggs Fruit Bean products Fats & Oils % +16.5% % +8.8% +11.4% October 211 October Figure 5: Nominal monthly cost of specific groups in the basic food basket, comparing October 211 with October 212 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, 2 3 ; Oldewage-Theron et al, 25 4 ). Figure 6 illustrates the estimated portion costs for these foods, calculated from the monthly food price data for October 211 and October 212. 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 212). 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 212 versus October 211 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 212 versus October 211), compared to the 'average' consumer's food basket (1.6 % inflation rate, as previously described). 3 Steyn, N.P., Labadarios, D. 2. National Food Consumption Survey: Children aged 1-9 years, South Africa, Cape Town: The Department of Health Directorate Nutrition. 4 Oldewage-Theron, W., Dicks, E. & Napier, C. 25. Situation analysis of an informal settlement in the Vaal Triangle. Development Southern Africa. 22(1):

10 Portion cost (R) R 4.5 R 4. R 3.5 R 3. White sugar (22g) R 2.5 Tea (2.5g) R 2. Full cream milk (56g) R 1.5 Brown bread (15g) R 1. R.5 Maize porridge cooked (532g) R. October 211 October 212 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 211 and October December 212 February 213 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 yearon-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 (P141, 21 November) reports that the monthly increase of 2.8 % in the food index is the highest since August 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 3 % 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 11

11 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. 12

12 APPENDIX A: DATA ON URBAN FOOD PRICE TRENDS Table A.1: Wheat products Wheat products Price level Percentage change Oct-11 Oct-12 July-12 to Oct-12 Oct-11 to Oct-12 Loaf of brown bread 7 g % 8.91 % Loaf of white bread 7 g % 9.41 % Cake flour 2.5 kg % 12.5 % Spaghetti 5 g % 11.4 % Macaroni plain 5 g* % % Average 9.6 % 1.91 % Wheat (R/ton) % % *Data from AC Nielsen Table A.2: Maize products Maize products Price level Percentage change Oct-11 Oct-12 July-12 to Oct-12 Oct-11 to Oct-12 Maize special 5 kg* % 41.9 % Maize super 5 kg* % 13.8 % Average 8.53 % % White Maize (R/ton) % % *Data from AC Nielsen Table A.3: Sunflower products Sunflower products Price level Percentage change Oct-11 Oct-12 July-12 to Oct-12 Oct-11 to Oct-12 Sunflower oil 75 ml % 4.25 % Medium fat spread 1 kg tub* % 14.8 % Brick margarine 5 g % 4.19 % Average % 7.75 % Sunflower (R/ton) % % *Data from AC Nielsen 13

13 Table A.4: Processed vegetables Processed vegetables Price level Percentage change Oct-11 Oct-12 July-12 to Oct-12 Oct-11 to Oct-12 Butter beans - tinned 41 g % 9.26 % Chopped peeled tomato 41 g* % 7.56 % Tomato & onion mix 41 g* % 11.4 % Canned peas 41 g* % 7.6 % Baby carrots 1 kg* % 1.8 % Green peas 1 kg* % 7.68 % Sliced beans 1 kg* % -1. % Super juicy corn 1 kg* % % Average % % *Data from AC Nielsen Table A.5: Fresh vegetables Fresh vegetables Price level Percentage change Oct-11 Oct-12 July-12 to Oct-12 Oct-11 to Oct-12 Carrots fresh per kg % -2.6 % Onions fresh per kg % 1.15 % Potatoes fresh per kg % % Tomatoes fresh per kg % 7.43 % Sweet potatoes fresh per kg % 14. % Cabbages fresh per kg % % Lettuces fresh per kg % % Pumpkins fresh per kg % 3.71 % Cauliflowers fresh per kg % % Average % % Table A.6: Processed meat Price level Percentage change Processed meat Oct-11 Oct-12 July-12 to Oct-12 Oct-11 to Oct-12 Meatballs in gravy 4 g* % % Picnic ham 3 g* % % Pork sausage per kg % 6.59 % Polony per kg % -.76 % Average 4.87 % 8.43 % *Data from AC Nielsen 14

14 Table A.7: Unprocessed meat Price level Percentage change Unprocessed meat Oct-11 Oct-12 July-12 to Oct-12 Oct-11 to Oct-12 Pork Chops Fresh per kg % -3.1 % Lamb Fresh per kg % % Beef Brisket Fresh per kg % 9.56 % Beef Chuck Fresh per kg % % Beef Mince Fresh per kg % 1.31 % Beef Rump Steak Fresh per kg % % Beef T-Bone Fresh per kg % 6.18 % Whole Chicken Fresh per kg % % Chicken Portions Fresh per kg % 11.6 % Average 7.77 % 7.37 % Table A.8: Dairy products Dairy product Price level Percentage change Oct-11 Oct-12 July-12 to Oct-12 Oct-11 to Oct-12 Fresh milk full cream 1 l sachet* % % Fresh milk full cream 2 l* % % Fresh milk low fat 1 l sachet* % % Fresh milk low fat 2 l* % 15.8 % Long life milk full cream 1 l* % 8.7 % Skimmed powder milk 1 kg* % % Total butter 5 g* % 6.52 % Cheddar cheese per kg % 8.48 % Average.74 % % *Data from AC Nielsen Table A.9: Fruits Fruits Price level Percentage change Oct-11 Oct-12 July-12 to Oct-12 Oct-11 to Oct-12 Apples fresh per kg % 5.73 % Bananas fresh per kg % 3.38 % Oranges fresh per kg % % Average % % 15

15 Table A.1: Fish products Fishes tinned Price level Percentage change Oct-11 Oct-12 July-12 to Oct-12 Oct-11 to Oct-12 Fish (excl tuna) tinned 155 g % 9.42 % Fish (excl tuna) tinned 425 g % 8.37 % Tuna tinned 17 g % % Average 2.87 % % Table A.11: Other products Other products Price level Percentage change Oct-11 Oct-12 July-12 to Oct-12 Oct-11 to Oct-12 King Korn 1 kg* % 24.6 % White Sugar 2.5 kg % 4.2 % Rice 2 kg % 2.17 % Ricoffy Reg 75 g* % 1.7 % Ceylon/Black Tea 62.5 g % -1.7 % Imana Soya Mince Tomato & Onion 2 g* %.21 % Eggs 1.5 dozen % 8.78 % Average -.83 % 5.68 % *Data from AC Nielsen 16

16 APPENDIX B: SUMMARY OF INFLATION FOR SELECTED FOOD ITEMS BETWEEN OCTOBER 211 AND OCTOBER 212 Table B.1: Food items in the urban areas ranked according to price changes (October 211 to October 212) Meat and meat products and dairy Fresh and processed fruits and % % Grain and grain products and dairy products vegetables % Ceylon/Black Tea 62.5 g -1.7 % Lamb Fresh per kg % Potatoes Bag 1 kg % Soya Mince Tomato & Onion 2 g*.21 % Pork Chops Fresh per kg -3.1 % Super Juicy Corn 1 kg* % Coffee Reg 75 g* 1.7 % Polony per kg -.76 % Carrots Fresh per kg -2.6 % Rice 2 kg 2.17 % Beef T-Bone Fresh per kg 6.18 % Onions Fresh per kg 1.15 % White Sugar 2.5 kg 4.2 % Total Butter 5 g* 6.52 % Bananas Fresh per kg 3.38 % Brick Margarine 5 g 4.19 % Pork Sausage per kg 6.59 % Pumpkin Fresh per kg 3.71 % Sunflower Oil 75 ml 4.25 % Fish (Excl Tuna) Tinned 425 g 8.37 % Apples Fresh per kg 5.73 % Loaf Of Brown Bread 7 g 8.91 % Cheddar Cheese per kg 8.48 % Canned Peas 41 g* 7.6 % Loaf Of White Bread 7 g 9.41 % Long Life Milk Full Cream 1 l* 8.7 % Tomatoes Fresh per kg 7.43 % Spaghetti 5 g 11.4 % Eggs 1.5 dozen 8.78 % Chopped Peeled Tomato 41 g* 7.56 % Cake Flour 2.5 kg 12.5 % Whole Chicken Frozen per kg 9.41 % Green Peas 1 kg* 7.68 % Macaroni Plain 5 g* % Fish (Excl Tuna) Tinned 155 g 9.42 % Butter - Tinned 41 g 9.26 % Maize Super 5 kg* 13.8 % Beef Brisket Fresh per kg 9.56 % Baby Carrots 1kg* 1.8 % Medium Fat Spread 1 kg tub* 14.8 % Beef Mince Fresh per kg 1.31 % Tomato & Onion Mix 41g* 11.4 % King Korn 1 kg* 24.6 % Chicken Portions Fresh per kg 11.6 % Sweet Potatoes Fresh per kg 14. % Maize Special 5 kg* 41.9 % Beef Chuck Fresh per kg % Cauliflower Fresh per kg % Chicken Portions Frozen per kg % Cabbage Fresh per kg % Fresh Milk Full Cream 1 l sachet* % Oranges Fresh per kg % Enterprise Picnic Ham 3 g* % Lettuce Fresh per kg % Whole Chicken Fresh per kg % Beef Rump Steak Fresh per kg % Skimmed Powder Milk 1 kg* % Fresh Milk Full Cream 2 l* % Bull Brand Meatballs in Gravy 4 g* % Fresh Milk Low Fat 2 l* 15.8 % Fresh Milk Low Fat 1 l sachet* % Tuna Tinned 17 g % * 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 % 17

17 (R/ton) Domestic price (R/ton) Jan-8 Jan-8 Mar-8 May-8 Jul-8 Sep-8 Nov-8 Jan-9 Mar-9 May-9 Jul-9 Sep-9 Nov-9 Jan-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Mar-12 May-12 Sep-12 Apr-8 Jul-8 Oct-8 Jan-9 Apr-9 Jul-9 Oct-9 Jan-1 Apr-1 Jul-1 Oct-1 Apr-11 Jul-11 Oct-11 Apr-12 Oct-12 International price (US$/ton) APPENDIX C: COMMODITY AND PRODUCT PRICE TRENDS C.1 Wheat price trends Between October 211 and October 212: International wheat price 5.66 % Domestic price of wheat % Domestic price of wheat Wheat (US No.2, Hard Red Winter ord. Prot, US Fob Gulf (Tuesday)) Figure C.1: Domestic market price of wheat against global market price Source: FAO and SAFEX Domestic wheat price followed the import parity price of wheat closely, because SA is a net importer of wheat. Between October 211 and October 212: Wheat import parity price % Wheat export parity price % Domestic price of wheat Import parity price of wheat Export parity price wheat Figure C.2: Import parity, export parity and domestic prices of wheat Source: SAGIS and SAFEX 18

18 (R/ton) Bread price (R/loaf) Domestic price (R/ton) Jan-8 Jan-8 Apr-8 Jan-8 Mar-8 May-8 Jul-8 Sep-8 Nov-8 Jan-9 Mar-9 May-9 Jul-9 Sep-9 Nov-9 Jan-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Mar-12 May-12 Sep-12 Apr-8 Jul-8 Jul-8 Oct-8 Oct-8 Jan-9 Jan-9 Apr-9 Apr-9 Jul-9 Jul-9 Oct-9 Oct-9 Jan-1 Jan-1 Apr-1 Apr-1 Jul-1 Jul-1 Oct-1 Oct-1 Apr-11 Apr-11 Jul-11 Jul-11 Oct-11 Oct-11 Apr-12 Apr-12 Oct-12 Oct-12 Wheat price (R/ton) International price (US$/ton) Between October 211 and October 212: Domestic wheat price % Brown bread price 8.91 % White bread price 9.41 % Loaf of brown bread 7g Loaf of white bread 7g Domestic price of wheat Figure C.3: Domestic market wheat price and bread price trends Source: Stats SA and SAFEX C.2 Maize price trends Between October 211 and October 212: International price of maize 2.1 % Domestic price of yellow maize % Domestic price of yellow maize Figure C.4: Domestic market price of maize against global market price Source: FAO and SAFEX Maize (US No.2, Yellow, U.S. Gulf (Friday)) Between October 211 and October 212: Export parity price % Import parity price 27.6 % Domestic price of yellow maize Import parity price of maize Export parity price of maize Figure C.5: Import parity, export parity and domestic prices of maize Source: SAFEX and SAGIS 19

19 Domestic price (r/ton) Sunflower oil (R/75ml) Maize meal price (R/5kg) Jan-8 Jan-8 Jan-8 Apr-8 Apr-8 Apr-8 Jul-8 Jul-8 Jul-8 Oct-8 Oct-8 Oct-8 Jan-9 Jan-9 Jan-9 Apr-9 Apr-9 Apr-9 Jul-9 Jul-9 Jul-9 Oct-9 Oct-9 Oct-9 Jan-1 Jan-1 Jan-1 Apr-1 Apr-1 Apr-1 Jul-1 Jul-1 Jul-1 Oct-1 Oct-1 Oct-1 Apr-11 Apr-11 Apr-11 Jul-11 Jul-11 Jul-11 Oct-11 Oct-11 Oct-11 Apr-12 Apr-12 Apr-12 Oct-12 Oct-12 Oct-12 Sunflower seeds (R/ton) Maize price (R/ton) Internal price (US$/ton) Between October 211 and October 212: Super maize meal price 16.2 % Special maize meal 41.9 % Domestic price of white maize 13.3 % Maize special 5kg* Maize super 5kg* Domestic price of white maize Figure C.6: Maize price and maize meal price trends Source: SAFEX and AC Nielsen C.3 Sunflower seeds price trends Between October 211 and October 212: Domestic price of sunflower seeds % Between October 211 and October 212 the international price of sunflower seeds 29.2 % Domestic sunflower Sunflowerseed (EU, cif Lower Rhine) Figure C.7: Domestic market price of sunflower seeds against global market price Source: FAO and SAFEX Between October 211 and October 212: Sunflower seed price % Average retail sunflower oil price 5.84 % Sunflower oil 75ml Figure C.8: Sunflower seeds price and sunflower oil price trends Source: SAFEX and Stats SA Domestic sunflower 2

20 Retail price (R/1l) US$/ton Jan-8 Mar-8 May-8 Jul-8 Sep-8 Nov-8 Jan-9 Mar-9 May-9 Jul-9 Sep-9 Nov-9 Jan-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Mar-12 May-12 Sep-12 Jan-8 Apr-8 Jul-8 Oct-8 Jan-9 Apr-9 Jul-9 Oct-9 Jan-1 Apr-1 Jul-1 Oct-1 Apr-11 Jul-11 Oct-11 Apr-12 Oct-12 C.4 Dairy price trends Between October 211 and October 212: Skim milk powder 1.61 % Whole milk powder 5.4 % Dairy_Skim Milk Powder (Oceania, indicative export prices, f.o.b.) Dairy_Whole Milk Powder (Oceania, indicative export prices, f.o.b.) Figure C.9: Skim milk powder and whole milk powder price trends Source: FAO Between October 211 and October 212: Milk producer price % Full cream milk price 1.79 % Fresh milk full cream 1l* Fresh milk low fat 1l* Milk producer price Figure C.1: Domestic producer price and retail prices of milk Source: MPO and AC Nielsen 21

21 (R/kg) (R/kg) (R/kg) Jan-8 May-8 Sep-8 Jan-9 May-9 Sep-9 Jan-1 May-1 Sep-1 May-11 Sep-11 May-12 Sep-12 Jan-8 May-8 Jan-8 Sep-8 May-8 Jan-9 Sep-8 May-9 Jan-9 Sep-9 May-9 Jan-1 Sep-9 May-1 Jan-1 Sep-1 May-1 Sep-1 May-11 Sep-11 May-11 Sep-11 May-12 Sep-12 May-12 (R/kg) Sep-12 R/kg Jan-8 (R/kg) Jan-8 May-8 Sep-8 Jan-9 May-9 Sep-9 Jan-1 May-1 Sep-1 May-11 Sep-11 May-12 Sep-12 May-8 Jan-8 Sep-8 May-8 Jan-9 Sep-8 May-9 Jan-9 Sep-9 May-9 Sep-9 Jan-1 Jan-1 May-1 May-1 Sep-1 Sep-1 May-11 May-11 Sep-11 Sep-11 May-12 May-12 Sep-12 Sep-12 C.5 Meat price trends The price of beef at retail level showed an average increase of 1.11 % for the different cuts Frozen chicken portions price by % per kilogram Beef brisket - fresh per kg Beef mince - fresh per kg Beef t-bone - fresh per kg Beef chuck - fresh per kg Beef rump steak -fresh per kg Chicken portions - fresh per kg Lamb - fresh per kg Pork chops - fresh per kg Figure C.11: Retail prices of beef, pork chops, chicken portions, whole chicken and lamb Source: Stats SA Between October 211 and October 212: Producer price for fresh chicken 9.43 % Frozen chicken price % Porker price % Baconer price 8.4 % Chicken- Frozen (R/kg) Chicken-Fresh (R/kg) Pork Porker (R/kg) Pork Baconer (R/kg) Figure C.12: Producer prices of chicken and pork Source: AMT Between October211 and October 212: Producer price of Beef-class A2/A % Prices of beef class B2/B3.82 % and class C2/C % Prices of lamb-class A2/A3 and class B 1.73 % and % respectively; prices of class C2/C % Beef Class A2/A3 (R/kg) Beef Class C2/C3 (R/kg) Beef Class B2/B3 (R/kg) Figure C.13: Producer prices of beef and lamb Source: AMT Lamb Class A2/A3 Lamb Class B Lamb Class C2/C3 22

22 Real FTRPS (R/bread) Real FTRPS (R/bread) Jan-8 Jan-8 Apr-8 Apr-8 Jul-8 Jul-8 Oct-8 Oct-8 Jan-9 Jan-9 Apr-9 Apr-9 Jul-9 Jul-9 Oct-9 Oct-9 Jan-1 Jan-1 Apr-1 Apr-1 Jul-1 Jul-1 Oct-1 Oct-1 Apr-11 Apr-11 Jul-11 Jul-11 Oct-11 Oct-11 Apr-12 Apr-12 Oct-12 Oct-12 Real Farm Value Share (%/bread) Real Farm Value Share (%/bread) 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 Between October 211 and October 212 The real farm-to-retail price spread of brown bread % The real farm value share of brown bread % Real FTRPS Brown Bread (7g) 1 Real Farm Value Share Brown Bread (7g) 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 Between October 211 and October 212 The real farm-to-retail price spread of white bread 2.33 % The real farm value share of white bread % Real FTRPS White Bread (7g) Real Farm Value Share White Bread (7g) Figure D.2: Real farm to retail price spread and real farm value share of white bread. Source: SAFEX, AC Nielsen and own calculations 23

23 Real FTRPS (R/ton) Real FTRPS (R/ton) Jan-8 Jan-8 Apr-8 Apr-8 Jul-8 Jul-8 Oct-8 Oct-8 Jan-9 Jan-9 Apr-9 Apr-9 Jul-9 Jul-9 Oct-9 Oct-9 Jan-1 Jan-1 Apr-1 Apr-1 Jul-1 Jul-1 Oct-1 Oct-1 Apr-11 Apr-11 Jul-11 Jul-11 Oct-11 Oct-11 Apr-12 Apr-12 Oct-12 Oct-12 Real Farm Value Share (%) Real Farm Value Share (%) D.3 Super maize meal real farm to retail price spread and farm value share Between October 211 and October 212 The real farm-to-retail price spread of super maize meal 3.51 % The real farm value share of super maize meal 4.31 % Real FTRPS Super Maize Meal Real Farm Value Share Super Maize Meal 2 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 Between October 211 and October The real farm-to-retail price spread of special maize meal % The real farm value share of special maize meal % Real FTRPS Special Maize meal Real Farm Value Share Special Maize Meal 2 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 24

24 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 Cheapest Maize Meal 5 kg Long Life Uht 1 l Ceylon Teabags Tagless 1s Sunflower Oil 2 l Margarine Brick 5 g White Sugar 2.5 kg Rice 2 kg Apples/kg Cabbage each No data Onions 2 kg Potatoes/kg Tomatoes/kg Banana No data No data No data No data Table E2: Price data different supermarkets in the Free State Province Products Free State Province Retailer A Retailer B Retailer C Retailer D Cheapest Chicken Braaicuts 2 kg Cheapest Maize Meal 5 kg Long Life Uht 1 l Ceylon Teabags Tagless 1s Sunflower Oil 2 l Margarine Brick 5 g White Sugar 2.5 kg Rice 2 kg 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 25

25 Table E3: Price data different supermarkets in the Gauteng Province Products Gauteng Province Retailer A Retailer B Retailer C Retailer D Cheapest Chicken Braaicuts 2 kg Cheapest Maize Meal 5 kg Long Life Uht 1 l Ceylon Teabags Tagless 1s Sunflower Oil 2 l Margarine Brick 5 g White Sugar 2.5 kg Rice 2 kg Apples/kg Bananas /kg Cabbage each Onions 2 kg No data Potatoes/kg Tomatoes/kg Table E4: Price data different supermarkets in KwaZulu Natal Province Products KwaZulu Natal Province Retailer A Retailer B Retailer C Retailer D Cheapest Chicken Braaicuts 2 kg Cheapest Maize Meal 5 kg Long Life Uht 1 l No data Ceylon Teabags Tagless 1s Sunflower Oil 2 l Margarine Brick 5 g White Sugar 2.5 kg Rice 2 kg Apples/kg Bananas /kg Cabbage each Onions 2 kg Potatoes/kg Tomatoes/kg

26 Table E5: Price data different supermarkets in the Western Cape Province Products Western Cape Province Retailer A Retailer B Retailer C Retailer D Cheapest Chicken Braaicuts 2 kg Cheapest Maize Meal 5 kg Long Life Uht 1 l No data Ceylon Teabags Tagless 1s Sunflower Oil 2 l Margarine Brick 5 g White Sugar 2.5 kg Rice 2 kg Apples/kg Bananas /kg Cabbage each Onions 2 kg No data No data Potatoes/kg Tomatoes/kg Source: Adcheck,

27 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 8 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 25/6 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 /CPI_Sources_Methods.pdf. AC Nielsen collects food price data on a monthly basis from approximately 1 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. 28

28 Compiled by: Price trends and discussion on selected topics: Londiwe Thabethe Hester Vermeulen Christo Joubert Heidi Phahlane Outlook: Ferdi Meyer Enquiries: Ronald Ramabulana: 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 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. 29