The oil is packaged at the factory. Photo: Getty
The Competition Commission has found that there is a possibility of a “cyclical” rise in sunflower oil prices in South Africa.
“This comes at a time when there is widespread concern about the rising food prices facing struggling consumers,” said the latest Food Price Monitor report.
The report shows that prices for sunflower oil processors rose 72% in 2022, which was much higher than sunflower seed prices, which remained relatively stable.
Despite this increase, retail prices rose by only 36%, suggesting that retailers absorbed some of the increase.
The commission said there was high and growing concentration along the sunflower oil value chain from seed to processing level and this “creates the risk of opportunistic price increases above cost growth during periods of inflation”.
“In the case of processor prices, these increases were not entirely driven by the price of sunflower seeds. While refiners may have experienced some increases in energy and fuel costs, the significant expansion in profitability is of concern to the commission as it may indicate opportunistic pricing behavior unrelated to costs,” the commission said.
READ | Inflation reached a new 13-year high
Global cooking oil prices have soared in response to the invasion of Ukraine, which disrupted sunflower oil exports from the important Black Sea region.
SA inflation data for July released on Wednesday showed butter and fats prices rose 36% in July compared to last year.
We live in a world where fact and fiction are blurred
In times of uncertainty, you need journalism you can trust. For 14 free days, you can access a world of in-depth analysis, investigative journalism, best opinions and a range of features. Journalism strengthens democracy. Invest in the future today. After that you will be billed 75 rand per month. You can cancel your subscription at any time, and if you cancel within 14 days, you will not be billed.