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Graph 5
illustrates the farm-to-retail-price-
spread for super maize meal between Janu-
ary 2008 and July 2017.
The farm-to-retail-price-spread showed
high volatility as a result of the substitu-
tion effect between special and super maize
meal.
When prices change, the likelihood arises
that consumers tend to switch to more af-
fordable options of maize meal or different
products as disposable income comes un-
der pressure. Between 2008 and 2017, the
farm-to-retail-price-spread of super maize-
meal fluctuated between R1 486/ton and
R5 037/ton.
Summary
It is clear that maize meal prices follow the
price trend of white maize. The analysis
also shows that when white maize prices
increase, maize meal prices at retail level in-
crease fast, but when maize prices decrease
it happens at a slower rate.
The assumption can be made that the pri-
ces at retail level have a slower transmission
effect when maize prices decrease. The lag
between the price of white maize and the
price of maize meal between three and six
months, with an average four months.
RELEVANT
White maize meal prices and trends
Graph 5: Real farm-to-retail-price-spread of super maize meal.
Sources: Safex (2017), Stats SA (2017) and own calculations
The maize meal prices follow the price trend of white maize. The analysis
also shows that when white maize prices increase, maize meal prices at
retail level increase fast, but when maize prices decrease it happens at a
slower rate.
April 2018
76
Grain SA/Sasol photo competition