Ever wonder how much money you will spend for food this year? ABSA has released their 2017 outlook for the agricultural sector.
When doing your weekend shopping, this could help to better budget for the up-coming months.
The drought wreaked havoc among in the agricultural sector last year, but it is expected to come to an end in 2017.
However, external factors such as South Africa’s poor exchange rate and growing import demands could see South African consumers paying more for certain products.
Prices that will rise:
Sugar:
The impact of high food inflation on sugar prices and consumer demand may also affect the demand for sugar as consumers are under pressure.
Citrus fruits:
The weak rand and increased expenditure on food indicates that the demand for oranges will increase. These factors support domestic prices following export prices to a higher level.
Onions:
Increased export numbers for onions support higher onion prices as the rand continues to weaken. Onion price movements do not correlate strongly with the value of the rand. However, the demand for onion exports to Southern African Development Community (SADC) countries and the rest of Africa has grown substantially over the past seven years.
Beef:
The drought resulted in more cows being slaughtered, which will hike prices during the herd-rebuilding phase.
Milk:
Producer prices are expected to follow the recent increase in the retail prices for milk. Producer prices may lag behind for up to six months before catching up.
Pork:
Consumers’ reduced disposable incomes, which were met with higher interest rates at the time when pork supplies remained constant, added to the pressure. Prices are expected to climb towards the end of the year
Food that is expected to decrease in price:
Maize, potatoes, tomatoes, eggs and poultry, and game.
