Tuesday, December 7, 2010

Its surprising that bread cost less in rural areas than in Urban areas, as the article below says. The question is, how do the bread suppliers keep their prices this low? And are these suppliers also supplying the urban areas or is it the rural suppliers who supply to these rural areas at competitive prices? Mmm...this is interesting and unless someone convince me otherwise, I think its the rural suppliers who keep the price of bread so low. Whichever way, it would be interesting to find out why this is the case. Artwell, a PHD thesis on this perhaps?

Another area which there have been a study on is on the costs of transport and how they contribute to these high prices. With our roads becoming poor every year, this is an area of concern and as Transport Planners we are really failing the rural population, and not only that but we are also forcing them to come to the cities, the cities which are already saturated.

Enough about my bullshit theory and back to the article

RURAL consumers are still paying substantially more for basic foodstuffs than their urban counterparts, the National Agricultural Marketing Council says.

According to its quarterly Food Price Monitoring Report for last month, released last week, rural consumers paid R16,86 more than urban consumers for the same food basket in October .

However, this was a decrease from R19,89 more in July .

The report takes a deeper look at food products in relation to the consumer price index (CPI) released by Statistics SA for the same period.

The index for last month showed annual inflation in food and nonalcoholic beverages for October was 1% and headline CPI for the same period 3,4%.

The council’s report said consumers in the rural areas paid R5,87 more for 2kg rice, R3,82 more for 5kg of maize meal and R3,11 more for 2,5kg of white sugar.

Full-cream long-life milk, margarine, peanut butter and black tea were also more expensive in rural areas than in urban areas.

These had an "annual inflation that exceeded the South African Reserve Bank’s 6% inflation target", the report said.

For example, the price of 250g of tagless teabags increased 9,02%, 250g of instant coffee 9,26%, 420g of butter beans 10,07% and 62,5g of tagless teabags 12,26%.

Food items in urban areas with annual inflation higher than 6% included lamb, which increased 10,26%, pumpkin (14,36%), apples (15,94%), cauliflower (18,37%), carrots (34,77%) and cabbage (6,61%).

The report monitored the price trends for 65 different food items sold in urban areas across SA , and 39 food items sold in rural areas.

The only items that were more expensive in urban areas than in rural areas were a loaf of white bread, a loaf of brown bread and sunflower cooking oil.

The report noted that the prices of agricultural commodities showed significant increases from October last year . The domestic price of wheat increased 25% , compared with international wheat prices’ increase of 39% during the same period. Sunflower seed prices increased 70% locally.


1 comment:

Anonymous said...

Look at it this way: The rural folks can go without breakfast or eat different brands of mdoko (poridge); they can cook different brands of dombolo (home made bread); they do not have money to spend unnecessarily hence they try their own provisions. If the urban bread makers like blue ribbon went to sell to the rural folks; they will be traveling more kms, more wear n tear, more overtime for the workers delivering, this will result in a loaf of bread costing double what you pay in urban areas. As the rural folk have got their own means of bread, they might not even buy that bread and as a fast moving conumable good, that bread will be stale in five days and will require to be returned, (that could amount to three quaters of the delivery). The other issue that adds up to these price disparities is the price fixing that has been rife - if they can get more money one km away, why go 100+ kms to get that money. Demand also plays the unwillingness to deliver where there is less demand. The bread which is there in the rural does not have all the ingredients that is added in the urban due to less competition, therefore poor qaulity, so with less cost in materials, labour, they have got no reason to charge more

The cooking oil - surely anybody can do without oil; I buy oil because I stay with other people other wise I could do with one litre of oil per year. The rural folks do not real need oil as they have got animal fat from slaughtered animals. Their food is mostly boiled, even eggs they prefer boiled, besides who wants to reduce the number of his chickens by having to consume eggs - sucks neh! The above scenario also plays a major role with oil - look at that loaf of dripping oil, its cheaper and more healthier. With boiled food you also risk less attacks in blood preasure, though of course the rural folk might not know that. With oil prices, there is also a strong possibilities price fixing

Eric give me a Topic for my masters thesis so that I can start deliberations