Food prices to go up in the new year

Business

Food prices are set to spike this year following developments in the year including spiralling fuel costs, the looting in July, Eskom blackouts, emergence if the omicron variant as well as substantially higher insurance costs.

In a notice yesterday, food producer Eskom said South Africa is facing its highest petrol price surge in history with a litre costing more than R20, which has a direct impact on the price of food.

The Basic Fuel Price reflects the costs of buying petroleum products from international markets, and the costs related to shipping these products to South Africa.

“This cost is largely influenced by the international price of crude oil, a weak rand-dollar exchange rate and high local taxes. But while the spread of globalisation means economic tremors in one part of the world have a bearing across the globe, escalating food prices have been further exacerbated by supply chains’ reliance on fuel in delivering goods to our shops and homes,” said Eskort.

Economist Mike Schussler concurred, saying the overriding factor likely to spike food prices over the festive season was the increasing price of fuel.

The Automobile Association of SA (AA) said the price of unleaded petrol inland has risen by 91.8% in the last 10 years, 60% in the past five years, and 41% in the last year alone.

 

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