From page 21
crops for a profit, and have
marketing and distribution
channels that enable them to
do to so.
And if you think that food is
not overly expensive, or if you
are naïve enough to believe
the retailers when they
exclaim, in all wide-eyed
innocence, that they “only
make 2-2,5% markup,” try
these numbers:
K Maize is currently selling
on Safex (the grains exchange
used by most traders) for
around R1 820 per ton. This
is lower than last year and is a
result largely of the bumper
harvest achieved last season.
#SAFoodCrisis
COMMENT: The markups being applied by
food processors, distributors, wholesalers
and retailers are, franky, obscene, and
South Africans should force their politicians
to do something about it
But if you buy a 10kg bag of
Iwiza maize meal, a staple
product for the majority of
South Africans, you will pay
R87-99.
Which equates to R8 799 per
ton, a markup of 280% on
the off farm price.
Now two observations are
necessary. Firstly, there are
obvious costs involved in
bringing maize off the farm,
milling it, packaging and
selling it as mealie meal in a
supermarket. Secondly, there
is a lag between the price off
farm and the price in-store,
for the reason that what is in
store today was actually from
last-year's harvest when the
off-farm price was much,
much higher, not the most
recent one. So one can
expect the consumer price of
the market, average price
R6,05. Pick n Pay on the East
Rand, the same 1kg bag –
R11-99.
And the market price, it
should be pointed out,
already includes the food-
maize meal to actually drop
mile-cost of transporting the
substantially over the next
commodity from, say,
twelve months as this season’s
Zebediela to Johannesburg,
lower-priced crop comes up
as well as washing and
for sale in the shops.
packaging.
But some crops are much
Fact is, the food processing
more immediate … there is
and retailing sector can say
no appreciable lag between
what it likes. Its profits are
the off farm transaction and
obscene.
the retail sale.
As evidenced by the Whitey
Take spinach, for example.
Basson saga. Now-retired
On the Johannesburg Market
mogul of Shoprite-Checkers,
recently, the stuff was selling
Basson, in a career spanning
for R1-09 per bunch of 4kg.
four decades, has done more
At roughly the same time, in
for South African retailing,
an East Rand Pick n Pay 500g
probably, than any other
of fresh spinach was retailing
individual, Raymond
for more than R11-00.
Ackerman included.
Or tomatoes: 1kg packet at
23
www.sasmallholder.co.za
Continued on page 26