Essential food prices show signs of modest decline, says Competition Commission
Image: Waldo Swiegers
The Competition Commission’s latest report shows cautious optimism about South Africa’s food market.
Some essential food prices are dropping, but the Commission stresses the need for ongoing monitoring to ensure consumers benefit fully.
This edition of the EFPM Report, which tracks the pricing of items like sunflower oil, brown bread, canned pilchards, and individually quick frozen (IQF) chicken, reveals key insights into the dynamics of the food supply chain.
The Commission notes a slight drop in various food item prices, though it warns that marginal decreases do not necessarily indicate a broader trend without vigilant oversight.
Among the notable observations, sunflower oil has shown improved price responsiveness; however, its producer-to-retail price spread remains at its highest level since 2021.
This suggests that even when upstream costs decrease, not all of these reductions have been swiftly passed down to retailers or consumers.
The price gap for canned pilchards is shrinking, showing that producers and retailers are working together to keep prices fair. This benefits consumers by ensuring a fairer distribution of cost savings.
Egg producer prices have dropped since November 2023, thanks to biosecurity measures and import adjustments. As the sector recovers, prices may stabilize even more.
Brown bread has not escaped the trend, with the report indicating lower average retail prices for this staple food item. The Commission’s focusing lens on brown bread aligns with its overarching goal of ensuring transparency across the market, especially amidst fluctuating supply and pricing.
The report also delves into the dynamics of South African white maize in the 2024/25 maize marketing season.
This sector has faced increased challenges due to adverse weather conditions, leading to heightened demand in local and export markets alike. White maize prices have risen above import parity levels, revealing a strained supply situation and robust domestic demand.
Yet, despite these pressures, the analysis suggests prices have not been fully reflected in maize meal costs, potentially due to inventory levels and supply chain efficiencies buffering against immediate price increases.
The Commission emphasises that such detailed monitoring of food prices is essential not only for understanding market behaviours but also for identifying any abusive practices within these sectors.
The EFPM Report aims to provide a clearer picture of the food landscape, fostering transparency that benefits consumers as well as producers in a time of economic fluidity.
The results underscore the necessity for ongoing scrutiny, especially considering the significant impacts of climate events on food availability and pricing.
As South Africa navigates the complexities of its food market, the Commission continues to uphold its mandate of promoting fair competition and protecting consumer interests.
IOL