WARNING: This is Version 1 of my old archive, so Photos will NOT work and many links will NOT work. But you can find articles by searching on the Titles. There is a lot of information in this archive. Use the SEARCH BAR at the top right. Prior to December 2012; I was a pro-Christian type of Conservative. I was unaware of the mass of Jewish lies in history, especially the lies regarding WW2 and Hitler. So in here you will find pro-Jewish and pro-Israel material. I was definitely WRONG about the Boeremag and Janusz Walus. They were for real.
Original Post Date: 2007-12-03 Time: 00:00:00 Posted By: Jan
[Folks, despite all the garbage our leaders and media are saying about inflation – rest assured: INFLATION IS HERE TO STAY AND IT WIlL GET WORSE! Jan]
Cash-strapped consumers are going to have to fork out even more for food over the festive season as inflation is set to worsen because of increased fuel costs and spending on credit, warned the government body responsible for monitoring prices.
The study of a basket of 67 food items by the national agricultural marketing council found that South Africans are paying more for the food than they were a year ago, and that food price inflation was rising.
Based on the urban food items monitored at retail level, national food prices increased, on average, by 16,26 percent between October 2006 and October 2007. This is 3,96 percent higher than the October 2007 figure of 12,3 percent reported by Statistics South Africa.
Basic items such as bread and dairy products, mealie meal, cake flour, vegetables, meat and poultry have gone up, in many cases at a rate higher than that of inflation.
Andre Jooste, a spokesperson for the council, said it is more likely for food prices to remain high and increase even further over the outlook period (November 2007 to February 2008).
“Although the first decrease in prices on the futures market can be expected due to traders’ anticipation of a much larger crop, it takes time for the decrease in futures prices to be transmitted to consumer prices and, therefore, consumer prices of food items will most probably remain high,” he said.
The council said exchange rate movements between the rand and the dollar are expected to show higher volatility, impacting on food prices, while shipping costs have already increased significantly during the past year because of rising fuel costs and a general shortage of shipping capacity.
“Although clear signals exist that consumer expenditure is under pressure, formal statistics show there is a general growth in lending. This indicates that consumers still have some room to manoeuvre.
“But any additional spending on food over the festive season will put upward pressure on food prices,” Jooste said.
The report by the council, released this week, found that South Africans living in rural areas were paying more for certain goods than people in urban areas. In January people in rural areas had to pay, on average, R4,01 more for a 5kg bag of maize meal than people in the urban areas.
The situation changed somewhat in October, when the difference between the price of maize meal in urban and rural areas narrowed to R3,69.
A 700g loaf of brown bread and 700g loaf of white bread were, respectively, R0,03 and R0,12 more expensive in January in rural areas than in urban areas.
But in October the opposite was true. On average, the price differences for the selected products narrowed over the period under consideration, from R1,09 to R0,86.
The council said higher interest rates have led to a significant increase in debt levels of consumers, pressuring consumer expenditure and also limiting the creditworthiness of consumers.
The expected consequences are therefore a slowdown in general consumer expenditure leading to pressure on food consumption expenditure and therefore food prices, especially in the more expensive and value-added food categories.
Lillibeth Moolman, the chairwoman of the South African national consumer union, said she was concerned by the latest inflation figures and said hiking interest rates made no sense.
“The rate hike will not help clear bad debt because many South Africans cannot afford to pay any extra on their existing debts.
“The danger is that these consumers might have to take out further loans in order to put food on the table.
“The debt spiral is increasing due to the increases over the past 18 months,” she said.
Moolman said Tito Mboweni, the Reserve bank governor, and his committee ought to find alternatives to tackle the inflationary problems. “It is not fair to let the man in the street bear the brunt of rate hikes. Already, consumers have no say in increases in school fees, university fees, hospital fees, Eskom, municipalities, roads, Telkom, so administrative price increases from the parastatals and government should be addressed,” she said.
With the added burden of the fuel price increase consumers are having to dig deeper into their pockets to pay for petrol and the poorest of the poor, who rely on gas and paraffin for heat and cooking, are suffering more, she said.
“Many believe our interest rates are modest but 40 percent of the population is unemployed. Interest rate hikes are not the answer. Let us rather start with basic financial education where it is needed the most and prudent government spending,” she said.
Goolam Ballim, the chief economist at Standard Bank, said food prices were rising globally, and that there seemed to be little respite for South African consumers.
“South Africa’s food prices are reflective of the global food market and one must take into account that the food chain has been affected by the increase in price of non-energy commodities,” he said.
According to the Link Global Outlook, published by the United Nations, continued robust global demand, particularly from emerging economies such as China, is a primary factor for the upward movement in non-energy commodity prices. At the same time, higher oil prices also contribute to the upward pressure on prices, either directly in the form of higher production costs or through an indirect substitution effect.
The Reserve Bank meets this week amid expectations that it will push up interest rates by another 50 basis points, resulting in the prime lending rate going up to 14 percent.