AYABONGA CAWE: Trade policy responds when prices are out of kilter with costs

When former finance minister Tito Mboweni asked last week “why we cannot even produce a waslap in SA”, lamenting the proliferation of Pakistani-made face towels in his neighbourhood, it was a familiar yet revealing cry. He assumed he did not find an SA-made waslap in store because we don’t make them here. Yet we do make face towels — in Hammarsdale for instance, not far from where more than 1,000 workers were retrenched from poultry operations in 2017.

My guess is that the towels produced there command a significantly higher price than those Mboweni found in his local store. And the mixed frozen chicken portions from Hammarsdale probably cost more in the nearby township of Mpumalanga than those found in the frozen boxes that arrive via SA’s harbours...

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AYABONGA CAWE: Trade policy responds when prices are out of kilter with costsHigher prices hit poor consumers harder but lower prices are not always a sign of fair competition
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