The government has instructed the cabinet’s economic cluster to put in place a food security plan of action to protect consumers from the negative effects of high food prices.
Consumer inflation slowed in July, reaching its lowest level in two years at 4.7% from 5.4% in June. This is the lowest reading since 4.6% in July 2021.
The fall was helped by a drop in the price of fuel and a moderation of increases in the price of food, nonalcoholic beverages, hotel accommodation and healthcare.
Food inflation moderated in July, from 11.1% year on year in June and a recent peak of 14.4% in March to 10% in July.
However, the easing in food inflation has not provided relief for consumers as food prices remain relatively high.
Minister in the presidency Khumbudzo Ntshavheni said the cabinet, during its weekly meeting on Wednesday, discussed the Competition Commission’s essential food price monitoring report, which found food prices are quick to rise as input costs go up but are slow to decrease once cost pressures go down.
“It has also flagged the concentrated nature of the food and retail markets as a concerning contributing factor. The cabinet has noted the commission’s recommended measures, including market inquiries to address structural features in the market that lead to high food prices and low levels of competition,” Ntshavheni said during a media briefing on Thursday.
The commission’s report, which was released earlier in 2023, found that retailers are taking advantage of soaring global food prices and inflating profit margins.
This is as food prices rose globally after the Russian invasion of Ukraine, a country that plays a major role in vegetable oil and maize production.
Questioned on whether the government is considering implementing a food price relief package for consumers and businesses — as seen during the height of the Covid-19 pandemic — Ntshavheni said she could not pre-empt the outcomes of the economic cluster’s plan.
The cluster includes the National Treasury, the electricity minister and the ministries of employment & labour, public enterprises, and trade, industry & competition.
“The economic cluster must consider the report issued by the Competition Commission and then make proposals to cabinet ... I cannot pre-empt what their work will entail.
“This work is against the backdrop of the inflation that is coming down. We would want to see the response of the industry, and particularly the food sector, in terms of pushing down food prices.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.