The latest Household Affordability Index by the Pietermaritzburg Economic Justice & Dignity group (PMBEJD) shows that food prices in South Africa remain stubbornly high, with warnings that the pressure at the tills will linger for longer.

For October 2022, the average cost of the Household Food Basket is R4,787.83. Month-on-month, the average cost of the basket decreased by R18.03 (-0.4%), from R4,805.86 in September 2022.

Year-on-year, the average cost of the basket increased by R470.28 (10.9%).

Notably, the year-on-year increase is lower than food inflation tracked by Stats SA for September but still far outstrips headline inflation, which was recorded at 7.5% in September 2022, down marginally from 7.6% in August 2022.

Food and non-alcoholic beverages increased by 11.9% year on year, up from 11.3% recorded the month prior.

While a month-on-month drop in prices – however marginal they may be – provides some relief, the wider narrative of a healthy, nutritionally complete basket of food being out of reach for many households in South Africa persists.

According to the PMBEJD, in October 2022, the cost of a basic nutritional food basket for a family of four persons is R3,234.69 – this is against the national minimum wage of around R3,800 a month for someone who works a full month.

However, this discounts monthly essentials such as electricity, transport, rent and other bare necessities, which puts households in a very precarious position, with the PMBEJD calculating that workers’ families will underspend on food by a minimum of 50.6%.

Worse still, analysts anticipate inflation staying higher for longer, with a drop-off only expected in the middle of 2023.

https://businesstech.co.za/news/wp-content/uploads/2022/11/Screenshot-2022-11-01-074001-300x209.png 300w" alt="" width="760" height="529" class="aligncenter size-full wp-image-639549" style="height: auto; max-width: 100%; transition: all 0.3s ease-in-out 0s; clear: both; margin: 0px auto; display: block; backface-visibility: hidden;" loading="lazy" data-mce-src="https://businesstech.co.za/news/wp-content/uploads/2022/11/Screenshot-2022-11-01-074001.png" data-mce-style="height: auto; max-width: 100%; transition: all 0.3s ease-in-out 0s; clear: both; margin: 0px auto; display: block; backface-visibility: hidden;" />

The Bureau for Economic Research (BER)’s outlook for CPI sits around 7% year-on-year for the next several months, coming off the back of annual producer price inflation (PPI), which remains elevated.

The most significant contributors to the annual spike were coke and petroleum, which are up a considerable 34.2% year-on-year, added the economists. This is followed by food products, beverages, and tobacco products – increasing by 12.1% year-on-year.

Of these indicators, a concern is that manufactured food products increased by a higher-than-expected 1.3% month-on-month in September after a 1% rise in August, the BER said, which suggests that there is more pressure to come on consumer food prices.

This concern over food prices has been exacerbated by the fact that the cost of diesel has increased. Diesel is a primary input for manufacturing, agriculture, and trucking. Its increase is set to have direct knock-on effects carried onto consumers.

Food producers are likely to adjust prices to accommodate the rising cost of fue, especially the agricultural industry, as fuel accounts for 13% of its input costs, said chief economist at the Agricultural Business Chamber of South Africa Wandile Sihlobo.

Food prices: October 2021 to October 2022 – big changes

The PMBEJD 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 tracked, only four are lower in price than a year ago, with one item unchanged. The remaining 39 items have all increased in price – 16 of which have seen price jumps far out of whack with inflation.

Some of the biggest price changes (±10%) include:

• Onions: +78%
• Cooking oil: +45%
• Green pepper: +30%
• Cake flour: +27%
• Carrots: +23%
• Brown bread: +20%
• White bread: +19%
• Spinach: +18%
• Cabbage: +17%
• Inyama Yangaphakathi: +16%
• Maize meal: +16%
• Cremora: +15%
• Samp: +15%
• Chicken livers: +13%
• Tinned pilchards: +12%
• Canned beans:  +11%
• Potatoes: -38%

https://businesstech.co.za/news/wp-content/uploads/2022/11/Food-index-YOY-October-2022-174x300.png 174w, https://businesstech.co.za/news/wp-content/uploads/2022/11/Food-index-YOY-October-2022-595x1024.png 595w" alt="" width="717" height="1233" class="aligncenter size-full wp-image-640579" style="height: auto; max-width: 100%; transition: all 0.3s ease-in-out 0s; clear: both; margin: 0px auto; display: block; backface-visibility: hidden;" loading="lazy" data-mce-src="https://businesstech.co.za/news/wp-content/uploads/2022/11/Food-index-YOY-October-2022.png" data-mce-style="height: auto; max-width: 100%; transition: all 0.3s ease-in-out 0s; clear: both; margin: 0px auto; display: block; backface-visibility: hidden;" />

Month-to-month changes are generally more marginal, but a few items saw big changes.

For the most part, there has been some slight relief in pricing from September, with 24 of the 44 items tracked dropping in price, albeit only slightly. Six item prices were virtually unchanged, with 14 items going up in price.

Food prices: September 2022 to October 2022 – big changes:

• Onions: +23%
• Butternut: +21%
• Green pepper: +11%
• Oranges: +11%
• Tomatoes: -15%

https://businesstech.co.za/news/wp-content/uploads/2022/11/Food-inded-MOM-October-2022-174x300.png 174w, https://businesstech.co.za/news/wp-content/uploads/2022/11/Food-inded-MOM-October-2022-595x1024.png 595w" alt="" width="717" height="1233" class="aligncenter size-full wp-image-640581" style="height: auto; max-width: 100%; transition: all 0.3s ease-in-out 0s; clear: both; margin: 0px auto; display: block; backface-visibility: hidden;" loading="lazy" data-mce-src="https://businesstech.co.za/news/wp-content/uploads/2022/11/Food-inded-MOM-October-2022.png" data-mce-style="height: auto; max-width: 100%; transition: all 0.3s ease-in-out 0s; clear: both; margin: 0px auto; display: block; backface-visibility: hidden;" />

Regional

Regionally, the difference in cost of the total household food basket in Joburg, Durban and Cape Town are consistent at around ±R150.

Springbok and Pietermaritzburg tend to be outliers in the data (Springbok being the highest, and Pietermaritzburg being the lowest).

• The Joburg basket decreased by R10.63 (-0.2%) month-on-month and increased by R586.19 (13.6%) year-on-year to R4,891.88 in October 2022.
• The Durban basket decreased by R139.86 (-2.9%) month-on-month and increased by R347.40 (8.0%) year-on-year to R4,674.46 in October 2022.
• The Cape Town basket increased by R57.62 (1.2%) month-on-month and increased by R449.91 (10.5%) year-on-year to R4,730.58 in October 2022.
• The Springbok basket decreased by R52.49 (-1.0%) month-on-month and increased by R439.77 (9.5%) year-on-year to R5,067.78 in October 2022.
• The Maritzburg basket increased by R48.94 (1.1%) month-on-month and increased by R514.11 (12.3%) year-on-year to R4,703.99 in October 2022