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afrol News, 15 October - Food prices in South Africa are rising (20 percent annually) at the double speed of non-food prices (10 percent), newly released statistics show. This will have the most negative effect on the country's poor, which spend a larger part of their income on food, unions fear. Food prices for the poor are rising at over 20 percent a year, while the increase in interest rates has driven housing costs up almost as fast. Non-food prices are however rising only around 10 percent a year. "As a result, the inflation rate for the poor is now almost 15 percent," South Africa's principal trade union, COSATU, says in a statement today. COSATU was "shocked by the latest inflation figures," spokesman Vukani Mde says. "They show that, once again, the poor are bearing the burden of inappropriate policies on inflation, combined with speculative food prices and a naïve belief in free markets in agriculture." This situation was imposing "an intolerable burden on our people," Mr Mde says. For this reason, the union called on all its people to join in on "actions against food profiteering in the next few months." During the next few weeks, the union was to announce details, which were to "include pickets against retail chains and maize traders." The union also called on the government to ensure that the provision of lower priced maize and school feeding schemes reaches all those in need. "We are concerned that the amounts of maize published in the press as private-sector donations (80,000 bags a month, while least three million households now live in poverty) are nowhere near enough to alleviate hunger." Government further should review its inflation targets and, "as a minimum, urgently strip out food inflation from the target." In general, the experience of the last year had indicated that inflation targets simply were not appropriate for countries like South Africa, which have relatively small, open economies and concentrated markets. - In these circumstances, the potential for external shocks is simply too great for inflation targeting to prove useful, the COSATU spokesman concluded. Sources: Based on COSATU and afrol archives
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