Fuel vs food: Explaining how the pricing works

When fuel prices increase, the cost of food tends to rise too - so why does it not seem to work the other way round?

Dr Mmatlou Kalaba, senior analyst and executive director at the Bureau for Food and Agricultural Policy (BFAP), says it's not quite as simple as that.

"The complexity arises from the fact that the value chain involves a number of players... there are people who are handling, there is packaging, there are other services like insurance."

Kalaba explains that sustained fuel price decreases will, however, benefit the economy overall.

He also says that while some players in the food chain might try to take advantage of the pricing flux, they eventually get caught out.

"There are competitors who slide into that advantage... it's primarily a result of seeing an opportunity."

To listen to Dr Mmatlou Kalaba in conversation with 702's John Perlman, click the audio below: