1 / 19

Food Price Monitoring Report

Food Price Monitoring Report. National Agricultural Marketing Council (NAMC). Food Cost Review 2005. Outline. The NAMC Food Price Monitoring (FPM) background FPM Committee 2003 key TOR FPMC key findings FPMC key recommendations Follow up FPM work: Food Cost Review

mgarland
Download Presentation

Food Price Monitoring Report

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Food Price Monitoring Report National Agricultural Marketing Council (NAMC) Food Cost Review 2005

  2. Outline • The NAMC • Food Price Monitoring (FPM) background • FPM Committee 2003 key TOR • FPMC key findings • FPMC key recommendations • Follow up FPM work: Food Cost Review • Food Cost Review 2005: observations • Latest CPI (Food) figures • Concluding remarks

  3. The NAMC • Statutory body: Marketing of Agricultural Products Act (MAPA) 1996 • Advisor to the agriculture Minister on agricultural marketing:

  4. Background to FPM • Many HH’s in RSA are poor & food insecure • Approx 14 million S. Africans are vulnerable to food insecurity (Stats SA) • In 2001/2002, many HH’s were affected by rising prices of basic foods • Minister established the FPMC in Jan 2003

  5. FPMC 2003 Key TOR • Monitor the pricing of basic foodstuffs • Investigate any sharp or unjustified price increases • Determine the competitiveness of production operations • Investigate incidents of predatory pricing and monopolistic tendencies

  6. FPMC key findings • Initial sharp increases in basic food commodity prices (notably maize) in 2001/02 • In some cases prices increases were far above the current rate of food price inflation (e.g. milk, peanut butter, margarine, onions) • Poor HH’s experienced higher inflation rates than richer HH’s • Prices in rural stores generally higher than in urban stores (in processed goods) • Levelling off & some decline in food prices noticeable in 2002/03

  7. FPMC key findings • Subsequent cooling off of prices not as high as initial spikes • NB: lower food price inflation not necessarily translates into cheaper food! • Some evidence of oligopolistic behaviour and monopolistic competition among some food industries • Limited number of competitors, brand loyalty, etc. - dictation of prices by retailers & processors

  8. FPMC Key Recommendations • Strategic grain reserves • Direct government programmes • Increasing competition and reduced barriers to entry • SAFEX rules transport and logistics • Improved agricultural information systems • NAMC to continue with food price monitoring

  9. FPM follow up work • NAMC to monitor both urban and rural food prices • Publishing of an Annual Food Cost Review & Quarterly Food Price Trends and media release • Urban food price monitoring progressing smoothly • Rural food price monitoring experiencing some challenges

  10. Published Documents

  11. Food Cost Review 2005 • Report’s key contents: • Food price inflation 1991 – 2005 • Trends in retail food prices 2004 - 2005 • Methodologies for calculation of farm value & farm-to-retail price spreads & some estimations • Trends in prices of marketing inputs • Case studies (tomatoes & onions)

  12. Food price inflation: measure of rate of increase in prices of food items in the “food basket” CPIF for most food commodities in rural areas generally higher than in urban areas (p8) Due to transport costs from urban value-adding firms, storage costs, extra labour, business risk, limited supply, etc. Food Cost Review 2005

  13. Food Cost Review 2005 • Farm value: measure of return received by farmers for farm-product equivalent of retail food sold to consumers

  14. Food Cost Review 2005

  15. Food Cost Review 2005

  16. Food Cost Review 2005 • Trends in prices of marketing inputs • Very small effect of fuel price on the CPI in both rural & urban areas • Price of packaging material initially increased (2002) but eventually levelled off by 2005

  17. Latest CPI Food figures • CFI Food in April was 6.2% (up from 4.4% in January( (Stats SA) • Prices for the following food items increased by more than 6% (year on year in April 2006): • Super & Special Maize Meal • Beef, mutton, chicken • Sugar • Rice

  18. Concluding remarks • Poor consumers especially in rural areas have suffered the most from the price hikes of 2001/02 • Subsequent levelling off has not been fully realised by consumers • Opportunity for price dictation by processors and retailers detected • This issue will be subject of further research by NAMC’s Markets & Economic Research Centre • The findings will inform the work of the Competition Commission

More Related