South Africa has seen possible ‘opportunistic’ increases in the price of sunflower oil, the Competition Commission has found.
This comes at a time when there is widespread concern over food price inflation faced by struggling consumers, the body said in its latest monitoring report on essential food pricing.
The report found that sunflower oil processor prices increased by 72% in 2022, which was far more than the price of sunflower seeds, which have remained relatively stable.
Despite this hike, retail prices only increased by 36%, which indicates that retailers absorbed some of the increase.
The commission said there was high and growing concentration along the sunflower oil value chain from sowing seed to the refining level, and this “creates a risk of opportunistic price increases above cost increases during periods of inflation”.
In the case of processor prices, these increases have not been entirely driven by the price of sunflower seeds. While processors may have seen some cost increases for energy and fuel, the large widening of margins is a cause for concern for the commission as it may indicate opportunistic pricing behaviour unrelated to costs, the commission said.
Global cooking oil prices have rocketed in response to the invasion of Ukraine, which disrupted sunflower oil exports from the important Black Sea region.
SA’s July’s inflation data, released on Wednesday, showed that oils and fats prices rose 36% in July from a year ago.