Transcript Presentation Name

Food price monitoring as a
policy-relevant indicator of
diverse food access
Presented by: Christo Joubert
Manager: Agro Food Chains & Knowledge Management
MERC
Table of content
•
•
•
•
•
•
Background.
Why do we need to monitor food prices?
A typical NAMC FPM report
SA food prices.
Global supply and demand & prices.
Evolution of long-term trends contributing to higher
prices.
• Short term factors that may influence future agric
prices.
• Longer-term factors expected to influence future agric
prices.
Background
• Depreciation of ZAR in 2002 result in:
– Increasing in agric commodities & input cost
– Increasing food prices + volatility
– Understand the relationship between food,
exogenous and endogenous variables.
– This led to the establishment of the:
•
•
•
•
•
Food Price Monitor
Food Cost Review
Input Cost Monitor
Trade Flow
Supply & Demand Estimates
Why do we need to monitoring
systems?
Because: The impact of high food prices at a country
level includes, amongst others, the following:
– Social unrest and food riots.
– Panic buying by some net importing countries to secure
adequate supplies and build domestic stocks of major
cereals – “Great grain robbery”
– Widening current account deficits for net importing
countries.
– Threat to macro-economic stability and overall growth,
especially of low-income, net-importing countries.
– More food insecure households and hence increased
pressure on governments to expand their social welfare
programmes.
A typical FPM
•
Foreword
•
Overall inflation and food inflation: South Africa and selected countries
•
Urban and rural food price trends: July 2012 – July 2013
•
Comparison between urban and rural prices
•
Price trends
•
International food prices
•
Estimated impact of food inflation on consumers
•
September 2013– November 2013 outlook
•
APPENDIX A: DATA ON URBAN FOOD PRICE TRENDS
•
APPENDIX B: DATA ON RURAL FOOD PRICE TRENDS
•
APPENDIX C: SUMMARY OF INFLATION FOR SELECTED FOOD ITEMS BETWEEN JULY 2012, APRIL 2013
AND JULY 2013
•
APPENDIX D: COMMODITY AND PRODUCT PRICE TRENDS
•
APPENDIX E: REAL FARM TO RETAIL PRICES SPREAD AND FARM VALUE SHARE OF STAPLE FOOD
ITEMS
•
APEENDIX F: DATA COLLECTION
South African food prices: Aug 2013
12.0
Headline CPI
Food and non-alcoholic beverages
10.0
CPI
8.0
7.0
6.0
5.3
4.9
5.5
5.0
6.9
6.3
5.8
5.7
5.6
5.6
6.2
5.9
6.3
5.4
4.9
5.9
5.9
5.7
6.8
6.4
6.2
5.6
6.3
6.8
5.5
4.0
2.0
0.0
Sep/12
Nov/12
Jan/13
13.3
Mar/13
May/13
July 2012 to July 2013
7.3
6.7
6.6
5.9
Jul/13
June 2013 to July 2013
5.8
5.9
4.6
3.5
0.7
-1.8
Oils and fats
-0.7
Fruit
-0.1
Sugar and sweets
-0.1
Other food
-0.3
0.2
Unprocessed
Bread and cereals
0.2
Fish
0.3
Milk, eggs and cheese
0.6
7.3
Meat
7.5
Processed
16
14
12
10
8
6
4
2
0
-2
-4
Vegetables
Percentage change
Jul/12
-0.9
South Africa vs. global inflation trends Aug
2013
Country
Overall inflation (%)
(April 2013)
Inflation of food and non
alcoholic beverages (%)
(April 2013)
South Africa
6.4
6.8
Botswana
5.7
4.7
Zambia
7.3
7.1
Turkey
8.8
12.7
Namibia
5.8
6.3
United States
1.9
1.4
United Kingdom
2.8
3.9
Brazil
6.3
11.4
Russia
6.5
4.9
India
5.8
11.9
China
2.6
5.0
Comparison between urban and rural food
prices (selected food items)
Rural food prices (R)
Product
Urban food prices (R)
Price
difference
(Apr-13)
Price
difference
(Jul -13)
April-13
July-13
April-13
July-13
R/unit
R/unit
Full Cream Long Life Milk 1L
10,61
11,74
10,93
10,7
−0,32
1,04
Loaf Of Brown Bread 700g
8,02
8,46
9,04
9,16
−1,02
−0,70
Loaf Of White Bread 700g
9,28
9,38
10,11
10,25
−0,83
−0,87
Maize Meal 5kg
31,13
31,46
29,76
23,73
1,37
7,73
Margarine 500g
25,54
20,27
16,49
16,11
9,05
4,16
Rice 2kg
23,62
23,08
21,01
21,51
2,61
1,57
Sunflower Oil 750ml
15,60
15,43
17,02
17,2
−1,42
−1,77
Ceylon/Black Tea 62.5g
6,50
6,50
8,00
8,14
−1,50
−1,64
White Sugar 2.5kg
26,40
27,36
24,65
25,42
1,75
1,94
9,69
11,46
Estimated impact of food inflation on
consumers
Nominal monthly cost of specific groups in the
basic food basket (Jul 2012 & Jul 2013)
5 Year % change: Nominal & Real
Top changers
Bottom changers
Polony per kg
Tomato & onion mix 410g*
Lamb - fresh per kg
Cereals 400g
Baked beans - tinned 410g
Picnic ham 300g*
Carrots - fresh per kg
Tuna - tinned 170g
Chopped peeled tomato 410g*
Maize special 5kg*
Sweet potatoes - fresh per kg
White sugar 2.5kg
Canned peas 410g*
Sweet corn - tinned 420g
White sugar 1kg
Sweet corn - tinned 410g
Cauliflower - fresh per kg
Tomatoes - fresh per kg
Instant coffee 250g
Pumpkin - fresh per kg
Cabbage - fresh per kg
Lettuce - fresh per kg
Chicken portions - frozen per kg
Loaf of white bread 700g
Pork chops - fresh per kg
Powdered milk 500g
Full cream milk - fresh 2ℓ
Mielie meal 5kg
Full cream milk - fresh 1ℓ
Fresh milk full cream 2ℓ*
Margarine spread 1kg
Eggs 2.5 dozen
Potatoes - fresh per kg
Chicken portions - fresh per kg
Beef rump steak -fresh per kg
Baby carrots 1kg*
Beef chuck - fresh per kg
Brick margarine 250g
Beef t-bone - fresh per kg
Beef brisket - fresh per kg
Loaf of brown bread 600g
Maize super 5kg*
0%
50%
Nominal % (5 yr)
100%
150%
Real % (5 yrs)
200%
250%
300%
-20%
-10%
0%
10%
Nominal % (5 yr)
20%
30%
Real % (5 yrs)
40%
50%
5 Year % change:
Average Nominal & Real
Polony per kg
Tomato & onion mix 410g*
Lamb - fresh per kg
Cereals 400g
Baked beans - tinned 410g
Picnic ham 300g*
Carrots - fresh per kg
Tuna - tinned 170g
Chopped peeled tomato 410g*
Maize special 5kg*
Sweet potatoes - fresh per kg
White sugar 2.5kg
Canned peas 410g*
Sweet corn - tinned 420g
White sugar 1kg
Sweet corn - tinned 410g
Cauliflower - fresh per kg
Tomatoes - fresh per kg
Instant coffee 250g
Pumpkin - fresh per kg
Cabbage - fresh per kg
Lettuce - fresh per kg
Chicken portions - frozen per kg
Top changers
Pork chops - fresh per kg
Powdered milk 500g
Full cream milk - fresh 2ℓ
Mielie meal 5kg
Full cream milk - fresh 1ℓ
Fresh milk full cream 2ℓ*
Margarine spread 1kg
Eggs 2.5 dozen
Potatoes - fresh per kg
Chicken portions - fresh per kg
Beef rump steak -fresh per kg
Baby carrots 1kg*
Beef chuck - fresh per kg
Brick margarine 250g
Beef t-bone - fresh per kg
Beef brisket - fresh per kg
Loaf of brown bread 600g
Maize super 5kg*
0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00%
Avg/yr % (Nom val)
Bottom
changers
Loaf of white bread 700g
-4.00%
-2.00%
0.00%
2.00%
4.00%
6.00%
Avg/yr % (Real value)
Avg/yr % (Nom val)
Avg/yr % (Real value)
8.00%
10.00%
Global supply and demand & prices
• Long-term trends & short-term shocks contributed in
different ways:
• Long-term trends in supply and demand have led to
gradually tightening world markets since late 1990s –
and to upward trending prices since 2002.
• The resulting reduced global stocks and stocks-to-use
ratios set the stage for:
 Short-term shocks & disruptions to further restrict world
food commodity supplies leading to policy responses
that raised short term demand and led to price spikes in
2007/08 and 2010/11.
Evolution of long-term trends
contributing to higher prices
• Developing country economic and population growth led
to increased food demand
– Growing middle class, increased urbanization, diet
diversification
• Slower growth in agric productivity
• Depreciating U.S. dollar
• Higher crude oil prices
• Biofuel production: USA, EU, BRAZIL, ARGENTNA,
CANADA, etc.
• Increased demand for biofuel and feedstock
• Above factors led to an upward trend in food commodity
prices, but did not directly cause the price spikes
Short term factors
that may influence future agric prices
• Weather
• Stock levels (Supply & demand balances; stocks
policies; self-sufficiency policies)
• Policy changes by food commodity exporters &
importers
• Exchange rates (mainly for commodities exchanged
in US$)
• Energy & other non agric prices / Agric production
costs
• Extent of global economic recovery
• Import demand: Who will be the importers? (Role of
foreign exchange reserves)
Longer-term factors
expected to influence future agric prices
• Biofuels production (Influence of oil prices; Role of
policies)
• Food consumption patterns (Continued income-driven
increase in per capita meat consumption?)
• Technology advancements
– Continued slowing of growth in productivity?
– R&D investments.
– Role/acceptance of GMO products.
• Natural resource constraints
– Land: Ability to expand cultivated area; productive capacity of
new land
– Water: Ability to continue rate of growth in irrigated areas
• Climate change
– Impact of temperature, precipitation, and seasonal changes in
cropping patterns & productivity. Variability.
Thank you
Contact details:
Christo Joubert
Tel: 012 341 1115
Fax: 012 341 1811
E-mail: [email protected]
Website: www.namc.co.za
Acknowledgements to other NAMC staff for assistance to prepare FPM and this presentation:
This presentation would not have been possible without the contributions from various
organisations and individuals. The NAMC would like to thank them for their willingness to assist
with this very important programme.
Disclaimer:
Information contained in this document results from research funded wholly or in part by the NAMC acting in good faith. Opinions, attitudes
and points of view expressed herein do not necessarily reflect the official position or policies of the NAMC. The NAMC makes no claims,
promises or guarantees about the accuracy, completeness or adequacy of the contents of this document and expressly disclaims liability for
errors and omissions regarding the contents thereof. No warranty of any kind, implied, expressed, or statutory, including but not limited to
the warranties of non-infringement of third-party rights, title, merchantability, fitness for a particular purpose or freedom from computer
virus is given with respect to the contents of this document in hard-copy or electronic format or in electronic links thereto. Any reference to a
specific product, process or service by trade name, trademark, manufacturer or other commercial commodity or entity is for informational
purposes only and does not constitute or imply approval, endorsement or favouring by the NAMC.
17