Advertise with fastmoving.co.za
 
 

GrainSA says the price of wheat was at a record low last year and manufacturers did not pass this on, while manufacturers claim major retailers set the price. Picture: Simphiwe Mbokazi.
GrainSA says the price of wheat was at a record low last year and manufacturers did not pass this on, while manufacturers claim major retailers set the price. Picture: Simphiwe Mbokazi.

Mixed views on effect of import duty on bread prices

ECONOMIC NEWS

IOL Business/ - Jul 21st 2016, 09:32

Johannesburg - There has been speculation that the price of bread is expected to rise following the imposition of a higher duty on the imported price of wheat. 

GrainSA and major food producers have argued about whether this will result in higher bread prices.

GrainSA says the price of wheat last year was at a record low and manufacturers did not pass this on to their customers, while manufacturers claim the price of bread is ultimately set by the major retailers and not by them. In fact, says Viccy Baker, of the consumer website Retail Price Watchbread, prices have already risen significantly this year.

“We looked at the average price of four standard 700g brown loaves in 2015 and 2016. Sunbake (made by Foodcorp) increased its price from the first quarter of 2015 to the first quarter of 2016 by 7.4 percent, with a further jump of 5.4 percent in April. A loaf that cost an average of R8.94 in the first quarter of 2015 now costs R10.12."

“Sasko (Pioneer Foods) increased its price in Q1 2016 from Q1 2015 by 7.1 percent, and then again by 2.8 percent in April. A loaf that cost an average of R9.30 in the first quarter of 2015 now costs R10.24; Albany (Tiger Brands), the most costly of the four for a standard loaf, increased from the first quarter of 2015 to the first quarter of 2016 by 7.5 percent. By contrast, the average price dropped by 2 percent in April. A loaf that cost R10.46 in the first quarter of 2015 now costs an average R11.02. Brown bread is something of a commodity and many consumers tend to buy the cheapest they can find on the shelves. As a result, the lower-priced brands are quickly exhausted and people who can least afford it are forced to pay more."

“GrainSA says there is no reason why increased import tariffs on wheat should raise the price of bread. Millers say they have little influence over the price of bread.”

According to the SA Institute of Chartered Accountants, the government zero rates VAT on brown bread “to benefit the poor. Yet the price keeps on rising”, Baker says.© Independent On-line 2013 

Read more about: wheat | south africa | grainsa | economy | bread

Related News

Eskom: The largest threat to the stability of the SA economy
10/09/2019 - 09:45
On Tuesday 23 July, South African Finance Minister Tito Mboweni tabled a bill before the National Assembly which would see national state-owned power utility Eskom benefit from an allocation of R59 billion over the next three years.

Innovative leasing deals boost Kenya's office market
04/09/2019 - 09:25
A creative approach to leasing deals is helping innovative landlords offset the challenges of high vacancies in an overstocked Nairobi office market, according to Broll Property Intel’s latest Kenya Office Market Snapshot H1:2019 report.

No pain, no gain for SA economy
02/09/2019 - 16:22
Despite SA’s fiscal crisis — and the fact that the country has very little to show for the loose fiscal policy run over the past decade — there is a lobby (mainly on the Left) that thinks the best way to resolve SA’s growth and fiscal challenges is to inject further fiscal stimulus into the economy.

Producer inflation slows to lowest level in five months
02/09/2019 - 10:51
Producer inflation moderated to its lowest level in five months in July, due to lower fuel prices.

Tito Mboweni issues surprise growth strategy
28/08/2019 - 09:59
On Tuesday, finance minister Tito Mboweni fired a shot across the bows of the government, publishing an economic strategy for the country on the Treasury website.