Consumers are likely to get a break from the surge of food prices as a result of slowed demand growth and the rise of outputs, the Organisation for Economic Cooperation and Development (OECD) and the United Nations (UN) have reportedly said.
Consumers are likely to get a break from the surge of food prices as a result of slowed demand growth and the rise of outputs, the Organisation for Economic Cooperation and Development (OECD) and the United Nations (UN) have reportedly said.
According to Bloomberg, a gauge of global food costs has “jumped to a nine-year high on the back of the Chinese demand and weather concerns”, putting a strain on the pockets of consumers who have already been hurt by the devastating effects of Cover-19.
But OECD and the UN have said that the inflation-adjusted prices may ease for a couple of years before staying flat through 2030 “as demand growth for grains and fish slows and farming supplies rise”.
“The fundamentals don’t say to us that we’re moving to a super-cycle of commodity prices,” Bloomberg quoted Maximo Torero, chief economist of the UN’s Food and Agriculture Organisation as saying.
Domestic and international maize prices
Meanwhile, IOL reported last month that South Africa’s food price inflation could ease in the second quarter of this year, owing to the expected large domestic harvest and the developments in the meat industry.
“Let’s recall that South Africa is typically a net exporter of maize and is, therefore, well integrated into global markets. Our rough calculations, using high-frequency data (daily data with more than 300 observations), shows that the correlation between domestic and international maize prices remains positive, about 60% for white maize, which is mainly traded into the African region, and 85% for yellow maize, which is traded into the global market.
“This implies that when global maize markets increase, domestic maize prices rise in tandem. Importantly, for wheat, rice and soya bean and other vegetable oils, where South Africa is typically a net importer, the correlation between domestic and global prices is stronger,” the report quoted the Agricultural Business Chamber(Agbiz) chief economist Wandile Sihlobo as saying.
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Picture: Getty Images
Compiled by Sinothando Siyolo
