Food prices will fall as country's economy recovers from Covid-19, says Competition Commission
The Competition Commission says it expects food prices to fall and has vowed to monitor retailers to make sure savings are passed on to consumers.
The commission’s acting spokesperson, Siyabulela Makunga, said the commission had been vigilant in responding to consumer complaints of price increases for essential food products.
Makunga said market factors, including the rand’s 25% depreciation in March, initially pushed food prices up during the lockdown, but these were now being reversed.
The commission had asked suppliers of imported staples such as rice and wheat to absorb cost increases during lockdown level 5, Makunga revealed.
Since the rand had now recovered about 10% of its value, imports would become cheaper, though lower prices would be delayed as current stock is priced at the higher levels.
Makunga said there was a short-lived increase in maize prices in April due to stocks running low before the new harvest arrived in May. But the price has come down in the last month due to the bumper crop being harvested.
This should start to be passed through to consumers this month.
The same applied to fresh produce as prices shot up in the initial period of lockdown due to panic buying.
However, since the end of April, prices across fresh produce markets, aside from non-seasonal fruit, have been declining, Makunga said.
Store prices should therefore decline, otherwise enforcement will occur.
The commission's CEO, Tembinkosi Bonakele, warned MPs recently that if the rand continued to decline, the country may experience more food price increases.
“Once the price of bread starts rising everybody is going to be quite upset and coming to the authorities,” he said at the time.
Bonakele said some of the suppliers of flour and bread had delayed putting up those prices.
Stats SA reported last month that the prices of essential products decreased by 0.5% during the Covid-19 level 5 lockdown in April. It said the index increased in the first week of April but then dropped in each of the three successive weeks.
All food categories ended that month in deflationary territory except for milk, eggs and cheese, oils and fats and other foods, it said in a statement.