The latest Household Affordability Index by the Pietermaritzburg Economic Justice & Dignity group (PMBEJD) shows that food prices increased in March 2022 – while Russia’s war in Ukraine will likely worsen matters for consumers in the coming months.
The group’s basket of 44 food items increased by R94.39 to R4,450.09, up 2.2% from R4,355.70 recorded in February 2022.
The civil society initiative’s data showed that year-on-year basket prices have increased by 10.2%, far outstripping headline inflation. The cost of the average household food basket increased by R410.53 from R4,039.56 in March 2021.
Statistics South Africa’s latest Consumer Price Index for February 2022 shows that headline inflation is 5.7%. CPI for food inflation was tracked at 6.7%.
The key point of contention around inflation figures is that salaries and wages are negotiated around headline inflation. The national minimum wage is often only increased by headline CPI, and social grants have more recently been raised at rates far lower than CPI.
This creates a scenario where the amount coming in, does not match the rising costs of basic living, pushing the poorest further into poverty.
“Because food is bought after money for transport and electricity have been paid for or set aside, in March 2022, we calculate that workers’ families will underspend on food by a minimum of 37.2%,” the group said.
This underspend comes after the new National Minimum Wage increment – which added R1.50 per hour for the typical worker – has been implemented and before the impact of much higher fuel prices, food prices and the new electricity tariff of July will all come crashing down on workers.
“The surge in the brent crude oil price – which is an input in everything from the farm to the plate – including the higher costs of wheat, sunflower oil and other foods and agricultural inputs which South Africa imports, will drive prices upwards as the conflict in Ukraine continues,” the PMBEJD said.
“We track prices in the first week of the month – the conflict in Ukraine has escalated since we collected prices.”
The outlook for food prices specifically related to the higher brent crude oil price and wheat, and other grains and cereals and legumes and oil – including higher fuel and the higher forthcoming electricity price tariffs – is likely to be severe for South Africa, the group said.
The basket comprises 44 core food items most frequently purchased by lower-income households, who make up most households in the country.
Of the 44 food items, 39 increased in price. Only three food items saw their prices drop over the last 12 months, while two were unchanged.
The most significant increases were cake flour, cooking oil, eggs, tea, and bread. Maize meal, rice, white sugar also saw price hikes.
These were the most significant changes, where prices increased or declined by 10% or more.
Food prices March 2021 to March 2022 – big changes
Cooking oil: +37%
Chicken liver: +32%
Beef liver: +30%
Frozen chicken: +11%
Chicken feet: +10%
Food prices February 2022 to March 2022 – big changes
Month on month, food prices changes are more muted. Of the basket of 44 items, 29 increased in price, seven items were flat, and the remaining eight saw a price drop.
The difference in cost of the total household food basket in Joburg, Durban, and Cape Town is consistent at around ±R150. Springbok and Pietermaritzburg tend to be outliers in the data (Springbok being the highest, and Pietermaritzburg being the lowest).