This allowed for relaxing several restrictions that impacted the food and beverage industry in South Africa. The most notable of these, related to the food industry, were that retailers were subsequently allowed to sell the full spectrum of their merchandise and that restaurants and food-away-from-home establishments were allowed to re-open, but on a limited scale, due to the regulations related to social distancing.
With these changes food prices were impacted through changes in demand and possible disruptions in supply chains as well as macro-economic of which the most notable is the related to exchange rate movements.
The biggest average product price increases were observed for eggs (33.4%), tomatoes (29.4%) and rice (11%). Other price increases were more moderate with cake flour increasing by 9.1%, white bread by 3.3% and UHT milk by 3.1%. The substantial increases in rice and cake flour prices can mainly be explained by the lagged result of significant exchange rate depreciation experienced since the beginning of 2020, considering that these are both products with strong links to the international market and there is typically a 6 week to 3 month period for these shocks to transmit to local food prices. Strong tomato prices are the result of demand support for vegetables during winter months combined with limited volumes on the markets. Egg prices, in turn, are increasing on the back of strong demand as one of the most affordable protein-rich foods derived from animals. The retail price of IQF Chicken prices seems to be picking up, albeit marginally. In April 2020 chicken prices tended to be lower due to inactivity of the hospitality industry. The slight increase seems to suggest that prices are supported by its re-opening.
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