The Effect Of Income On The Market For Carbohydrates In South Africa

Despite the importance of the carbohydrate market as a source of staple food for the majority of the South African population, very little statistical information is available on the subject as a basis for policy formulation. Research centred on the white maize industry. Results show that regional differences within the market for maize are of cardinal importance, making country-wide generalisations dangerous and a regional marketing strategy imperative. One of the most significant results for the strategic marketing of maize meal is that a single population estimate for income elasticity is inadequate, especially when 94% of maize meal is consumed by a single consumer group - the Black population. Indications are that for Blacks in South Africa, maize is a normal good if seen in a national context. Consequently, as incomes fall or as relative prices rise, less maize is consumed. This is supported by urban price elasticities. It is proposed that this could have had a substantial effect on maize consumption in the past and have important implications for the marketing of staple food in a new South Africa.