What is driving food inflation?

[Dave A]

Food inflation remains stubbornly high - the question is why?

Maize and wheat producers cannot be blamed for the country's high food prices, Grain SA said on Thursday.

"The price of basic foodstuffs, like maize and wheat which are used as the basis for staple foods, cannot be blamed for the high levels of inflation," Grain SA's chairperson Neels Ferreira said in a statement.

He said the price of white maize from April 1, 2008 to April 1, 2009 had decreased by 13.8 percent while wheat was down 34.8 percent in the same period.

However, the price of a 700g loaf of brown bread had increased from R5.75 in March 2008 to R7.21 in March 2009 - a rise of 25.39 percent, Ferreira said.

He added that a five kilogram packet of maize meal had risen from R21.78 to R23.16 in the same period.
full story from Business Report here

Well, if it is not the producers...

What's happening in the rest of the food supply chain?

[Marq]

Price fixing
Cartels
Retail store markups

Initial indications are that neither Pick 'n Pay nor Shoprite will take legal action against the bread and mielie meal producers. Under the previous government, the markets in most food products were subject to extensive price-fixing and cartel activity.

nov 2007 report

Nothing has changed - my guess is that the Retailers threats were empty marketing ploys to place the blame elsewhere and the current government is worse than the previous one with regard to controlling and manipulating.

The fines were as said, a drop in the ocean compared to what is probably really being raked in. The same scenario apparently exists in the dairy industry and farming activities.

[Dave A]

So ultimately it seems we have been failed by the Competition Board, then.

It's funny how things add up and snowball. If the Competition Board had stopped the odd merger over the years, or taken an overly dominant market player and instructed them to break the company down, we might not have ended up with these monoliths.

It seems SA is too soft on anti-trust issues. And it's really showing up in the food prices.