Traditionally food inflation picks up over November and December. This year BOSASA has seen unprecedented increases in the "basket basics", on the items that not only contribute to the highest per centum usage, but also add to 80% of the costs. In discussions with key suppliers Ishmael Mncwaba, Angelo Agrizzi and Gavin Watson have pulled out all stops to block negative impacts on Bosasa clientele which include Dept of Correctional Services, the Department of Home Affairs and the Department of Social service.
Angelo Agrizzi reiterates - "We first started picking up the adverse increases in February and March of 2008. The world price index averaged 200 points up from 159 in 2007. We then saw February 2011, at a peak of 238 points, a 49,6% jump from 2007." According to Ishmael Mncwaba, this is happening across all food spectrums. An example of this is that red meat and poultry prices would see a slight decline, and the trend has been to park the higher pricing
Maize pricing it seems has played the largest role. Considering that maize products are also used in poultry and red meat production it contributed to a major cost for the latter. It rose from R1320.00 per ton in 2010 to R2530.00 per ton from December 2011. This showed a 91,6% year on year increase.
Considering that maize forms the staple food for over 60% of our population, one shudders to think what the effect is on each family's basket of goods.
Ishmael Mncwaba and Angelo Agrizzi have kept their fingers on the pulse: "It's pointless to analyse food inflation on CPIX. How on earth do you tell a rural family that CPIX is just over the 10% mark, when they now paying almost double for the same bag of maize they bought at the same rural concession a year ago? Perhaps it's time to revisit the establishment of a commission with the view to stabilizing the maize prices in Southern Africa. This is a move Bosasa would welcome."
Following the last price fixing saga, it is clear that even a basic such as bread is not immune. Priced at R5.45 in May 2008, the same product now retails at R9.75 per loaf. Once more we see a cost increase in about 78%. This has had a direct effect on Full Facilities costs, as bread is more than a staple. It forms at least 20% of our day to day catering costs.http://www.blogger.com/img/blank.gif
Red meat prices have risen astronomically from a R34.75 average in May 2008 to a mind boggling R58.90. In December 2011, we saw a whopping 69% increase, with poultry trailing behind at an average of 32%. The only reason for this is that the local market has been somewhat governed by imported poultry at very fair prices.
All in all, at this stage it is not possible to predict where food inflation will end mid-2012. We are however doing our best to try and keep it below the 30% mark for our clientele, in the hope that we don't have our plans derailed by unforeseen weather patterns" says Gavin Watson.
Gavin Watson - Bosasa
Bosasa - Let Food Be Thy Medicine
Umtya Nethunga
