1. Food Price Monitoring Committee: Final report

2. Mandate Established under Section 7 of the Agricultural Marketing Act. Terms of reference: Monitor the prices of basic foodstuffs Investigate any sharp or unjustified price increases. Investigate price formation mechanisms within the value chain of basic food stuffs Investigate collusive, discriminatory or any unfair business practice in the basic food value chain Recommendations Report quarterly to Minister

3. Monitoring Task Selected 26 basic food commodities Continous monitoring at 6 monitoring points in all 9 provinces (urban and rural) since October 2002. Also monitored farm requisites: fertiliser, chemicals and animal feed Inputs from consumer forums, public, and annual minimum standard of living survey. Retail scanner data Other official data sources

4. Investigations on Pricing behaviour Investigations: marketing margins and farm-to-retail price spreads influence of changes in the exchange rate and the in the costs of processing and marketing in the food chain farm-to-retail price spread in the case of spaza shops and other rural stores Analysis of price transmission in the food chain and role of market power

5. Outline of the report 1.Summary report 2.Introduction and background (context, issues, framework, data sources) 3.Monitoring price trends 4.Investigation of SAFEX market and detail analysis of 8 supply chains 5.Other aspects: Inputs, silos, transport, retailers, market power 6.SADC food security situation 7.Recommendations

6. Some highlights……..

7. SAFEX white maize price and maize meal price Jan 2000-June 2004 Average SAFEX price Jan 00-Sep01 R743/ton 166% Average Maize meal price Jan00- Jan02. R23.5/10kg 46.3% 38% 17%

8. Average monthly retail prices for brown and white bread: Jan 2000 – June 2004. Average SAFEX price Jan00- Oct01 R1321.73/ton 57.2% 33%Average Brown Bread Price Jan00 – Nov01 R3.14 31% 15%

9. Average monthly retail prices for 1kg Tastic rice: Jan 2000 – June 2004. Average price of rice Jan00-Dec01. R6.67/kg 16.9%

10. Real Real SAFEX white maize and maize meal prices.

11. Real Real bread prices

12. Real chicken prices

13. Real Real stewing beef price

14. Real Real milk prices

15. ….Part 4: Was the SAFEX market manipulated??…

17. Main variables driving the long-run SAFEX wheat nearest month contract price: R/$ exchange rate and US #1 hard red prices. Actual and estimated SAFEX wheat prices

18. Supply chain analysis…..

19. Average Cost of Producing White Bread Feb00-Dec02

20. Maize: Milldoor prices and Margins

21. Maize: Real Wholesale –to- Retail Margin

22. Findings Price trends: Difficult to generalise but food prices did recover to lower levels. Food basket somewhat cheaper Monitoring had positive effect Supply chain analysis: Provided clearer understanding of costs and market structure. Market structure could provide opportunity for predatory and unjust pricing but little evidence of such practices

23. Recommendations Continue price monitoring: SA Food Cost Review Strategic grain reserves: Will have limited impact at high costs Options for direct government action for household food security: Some already implemented Improved agricultural information systems Others: monitor competitive environment; rules for derivatives market (SAFEX) Transport infrastructure