By Azhar Vadi – Cii News -10-04-2012
If you are intending turning butter into a liquid gold called ghee; or if you think old fashioned is still healthier than margarine; or if you just love baking, it may be advisable to stock up on the yellow raw material as soon as possible.
Several reasons have been punted as possible price shifters in the butter industry including a shortage of butter fat, escalating costs of milk and packaging costs.
Speaking to the Business Report, Shoprite Holdings spokeswoman, Sarita van Wyk said, “The price level is influenced by supply and demand factors, natural disaster and input costs. The price of butter has seen supplier increases over the last few months due to milk shortages and in increase in the price of raw milk.
The costs of dairy production and packaging have also pushed the prices up as plastic manufacturers have increased their costing.
Although the price of dairy products are bound to go up with consumers bearing the brunt of the increases, the industry is still lagging behind the price hikes evident in the other markets such as grain and meat.
Despite this, butter producers are at pains to try and convince consumers that they are getting value for their money.
Manie Roode, Clover South Africa’s deputy chief executive, told the Business Report that dairy products made in South Africa were about 30-40 percent cheaper than imported products. “Consumers get value for money,” he said. “There are no excessive margins. Raw milk is the same price internationally.”
Clover products use about 27% of all raw milk in South Africa.
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