SA Struggles to Cope As Inflation Drops But Food Prices Hit 14-Year High, Economist Blames Profit Maximisation

• The food and non-alcoholic beverages inflation in South Africa has reached 13.4%, the highest it's been since 2009
• Economic expert Professor Bonke Dumisa claims the soaring price of food is due to profit maximisation by middlemen
• The Competition Commission has launched an inquiry into food prices to investigate uncompetitive behaviour and price fixing

JOHANNESBURG - Food prices in South Africa have reached an all-time high even though the latest Consumer Price Index (CPI) shows a drop in inflation countrywide.

The CPI decreased to 6.9% in January from 7.2% in December. However, the inflation of food and non-alcoholic beverages soared to a 14-year high when it climbed to 13.4% in January, TimesLIVE reported.

The reason for this disconnect may be more nefarious than South Africans think. Speaking exclusively to Briefly News, economic analyst Professor Bonke Dumisa pointed to multilayer intermediaries as a source of soaring food prices.

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The economic analyst expressed disappointment, claiming that casual research shows that the agricultural sector and farmers are not the culprits.

Dumisa said:

"It is the multilayer middlemen who are milking it for profit maximisation, regardless of the negative multiplier effects on the South African economy."

Dumisa added that the only time South Africans may hopefully experience an easing of food prices is if these shadow middlemen are exposed and brought to book.

Competition Commission launches inquiry into SA's soaring food prices

There is light at the end of this dark tunnel as the Competition Commission has decided to investigate food prices in the county.

According to Business Tech, the inquiry will look into market conditions along the fresh produce supply chain in SA and will specifically look for any evidence of uncompetitive behaviour or price fixing.

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The inquiry, which will begin in March 2023, will focus mainly on the fresh produce market but is a start in uncovering what is happening with SA's food prices.

South Africans are floored by the rising food prices in the country

South Africans have questioned how people survive as food costs keep soaring.

Below are some comments:

@ThatManDon exclaimed:

"Our standard monthly household food shopping list is up approximately 50% on average from 2019 prices. I don't know how those with very little are surviving!"

@koenaite claimed:

"Just discovered 10kg of potatoes costing R140.00 at Foodlovers Market."

@quesquecestca added:

"Purchasing power is getting lower every year."

@Manny_867 commented:

"The gaps keep getting wider every year."

@bevthrills complained:

"With unemployment levels at their highest."

How will the repo rate increase impact ordinary South Africans? How it works and 4 other questions answered

In a related story, Briefly News reported that the South African Reserve Bank set alarm bells ringing across the country when it announced that the repo rate would be increased by 25 basis points on 27 January 2023.

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Understandably, ordinary South Africans are worried much how the rate hike will hurt their pockets and how they can come out at the other end of the increase with their finances intact.

Briefly News reached out to independent economic analyst Professor Bonke Dumisa to get answers to the nation's most pressing questions.

Source: Briefly News