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Reprieve for consumers at till as prices tick marginally higher this month – food index

| Economic factors

By: Given Majola - IOL Business

Consumers got a reprieve at the till this month as the cost of the average household food basket showed a marginal increase.

While the cost of the average household food basket increased by 63 cents, 0.0%, from R5 277.30 in February to R5 277.93 this month, the cost of the average household food basket has spiked by R311.72 (6.3%) from R4 966.20 in March last year, according to the Pietermaritzburg Economic Justice & Dignity Group’s (PMBEJD) Household Affordability Index.

Mervyn Abrahams, the PMBEJD programme coordinator, said the March price data showed a marginal increase in the total cost of the average household food basket. Twenty-eight foods increased, 16 foods decreased, while “all baskets fluctuated quite unpredictably this month”.

Foods in the basket, which increased by 5% or more in March 2024, included: curry powder (6%), chicken feet (6%), inyama yangaphakathi (beef tripe) (6%), fish (8%), tomatoes (12%) and cabbage (12%).

The food items which increased by 2% or more this month included: rice (3%), sugar beans (4%), samp (2%), stock cubes (3%), tea (3%), chicken gizzards (3%), chicken livers (2%), green pepper (2%), Cremora (3%), canned beans (2%), peanut butter (3%), and brown bread (3%).

The items that decreased by 5% or more included: carrots (-7%), butternut (-20%), apples (-6%), and oranges (-22%).

Foods in the basket which decreased in price by 2% or more included: potatoes (-4%), beef liver (-2%), spinach (-4%), and white bread (-2%).

The PMBEJD said this month, food baskets increased by small amounts in Johannesburg, and Cape Town, and by a very high amount in Springbok. Food baskets decreased marginally in the KwaZulu-Natal areas of Durban, Pietermaritzburg, and Mtubatuba.

The Joburg basket increased by R29.76 (0.6%) compared to last month, and increased by R367.07 (7.3%) compared to the same period last year, reaching R5 387.28.

The Durban basket decreased by R18.83 (-0.4%) compared to last month, and increased by R372.71 (7.7%) compared to last month to R5 244.11.

The Cape Town basket increased by R47.55 (0.9%) on a monthly comparison and increased by R230.83 (4.7%) compared to the current period last year to R5 158.61.

The Springbok basket increased by R288.84 (5.2%) month-on-month, and increased by R432.71 (8.0%) year-on-year (y/y), to reach R5 862.74.

The Pietermaritzburg basket decreased by R1.91 (-0.0%) month-on-month, and increased by R229.78 (4.7%) y/y to R5 122.13.

The Mtubatuba basket decreased by R12.34 (-0.2%) month-on-month, and increased by R225.50 (4.4%) y/y to R5 375.88.

During February, the nominal cost of the National Agricultural Marketing Council’s 28-item urban food basket amounted to R1 257.23 compared to the R1 251.50 reported in January. This represents a monthly increase of 0.5% and a y/y increase of 9.5%.

On Tuesday, the Crop Estimates Committee announced that it now forecast South Africa’s 2023/24 total grain and oilseeds production at 15.8 million tons, down 9% from last month and 21% lower than last season’s harvest. This year’s overall decline in production prospects was attributed primarily to poor yields and not the area reduction, as farmers tilled more land than in the 2022/23 season.

From a consumer perspective, the Agricultural Business Chamber (Agbiz) said the current drought presented upside risks to food price inflation.

“But the major issue is white maize. The favourable supplies of other grains in the world market, mainly yellow maize (also rice and wheat), and the moderating prices mean South Africa could be slightly cushioned in these commodities.”

Wandile Sihlobo, the chief economist at Agbiz, said that still, the exchange rate would be an important consideration when assessing the possible imports of wheat and rice (and possibly yellow maize) into South Africa, assuming the country continued to see a further downward revision of the crop forecasts.

BUSINESS REPORT

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