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South Africa’s food
prices will rise gradually from 2011 partly as the economic recovery
gains pace, increasing the likelihood of more protests, the
Agricultural Business Chamber said on Wednesday.

Households,
especially in the lower-income level, spend a large chunk of their
income on food and higher food prices in recent years contributed to
millions of people’s inability to escape poverty, more than 16 years
after the end of apartheid.

John Purchase,
chief executive of the chamber said any spike in food prices could
signal increased activism and possible strikes by powerful labour
federation Cosatu.

“While food prices
are still coming down at the moment… it is going to bottom out
probably within the next six months or so,” he said on the sidelines of
an agriculture conference. “There will be gradual increases in food
prices, we believe, again from 2011. How big that rise is, is very
difficult to predict.”

South Africa’s
annual consumer price inflation slowed more than expected to a
four-year low of 4.8 percent in April as food price pressure eased,
compared with March’s 5.1 percent. Inflation has slowed sharply since
peaking close to 14 percent in 2008 and food price inflation, the main
driver at the time, has trended downwards, slowing to 0.9 percent on an
annual basis in April.

Protests

Cosatu and Fedusa-
two of the largest union federations in the country — protested
against high food prices in 2008. Although the biggest economy in
Africa has emerged from its first recession since 1992, household
finances are tight after about a million jobs were shed and as debt
levels remain high.

Purchase said the
first sign of food inflation would be seen in the price of maize, which
is expected to ease further in the short-term partly due to a bountiful
harvest. South Africa’s agricultural minister said in April the country
had secured foreign markets to sell the surplus maize produced in the
2009/10 season to help safeguard maize prices for local farmers.

“We have a big surplus of 4 million tonnes and if it’s not all
exported… it’s going to depress prices probably into the next season
quite significantly, that’s why I say there is going to be a time lag
in this whole period,” he said. “As we see economic recovery taking
place we will probably see bigger demand for resources, like oil and
fertilizer … So all this puts pressure on demand for (commodities
like maize) and that’s going to drive up food prices.”