Food prices right now in Joburg vs Cape Town vs Durban

Times are tough and are getting increasingly more difficult for consumers in South Africa.

Petrol prices are rising almost on a monthly basis, often above inflation – and to a record high on Wednesday – while food prices continue to climb and Eskom continues its load shedding regime amid constant breakdown’s in the country’s power infrastructure.

The scale of South Africa’s financial woes will be revealed on 11 November, when finance minister Enoch Godongwana tables the 2021 Medium Term Budget Policy Statement.

Petrol prices climbed to a record on Wednesday, adding to inflationary pressures in an economy that imports almost all of its fuel, Bloomberg reported.

The retail cost of 95-octane petrol climbed by almost 7% to R19.54 a litre, while the latest increase of R1.21 per litre puts petrol inflation at 33.9% year on year, noted Kevin Lings, chief economist at Stanlib. Fuel prices are expected to climb even further in December, he said.

Higher average oil prices, a weaker rand and higher levies on petrol and diesel are behind the latest increase, the fourth in the past five months, Bloomberg pointed out.

Fuel accounts for almost 5% of South Africa’s inflation basket and higher costs relative to 2020, when oil prices plunged after the onset of coronavirus pandemic, have been driving price growth this year. Annual inflation quickened to a four-month high of 5% in September.

Bloomberg noted that the South African Reserve Bank prefers to anchor inflation expectations close to the 4.5% mid-point of its target range and its recent warnings of upside risks have caused a jump in traders’ rate-hike bets.

Forward-rate agreements starting in one month, used to speculate on borrowing costs, fully price in a quarter-point increase in the benchmark repurchase rate in November.

The implied policy rate path of the central bank’s quarterly projection model, which the monetary policy committee uses as a guide, indicates a 25-basis point increase in the final quarter of 2021 and in every quarter of 2022 and 2023.

Eskom, meanwhile, on Tuesday resumed load shedding following a very brief hiatus to avoid blackouts during local government elections. While load shedding stopped on Wednesday, Eskom warned that its systems remain under pressure.

And food prices climbed again in October, data from the latest Household Affordability Index by the Pietermaritzburg Economic Justice & Dignity group (PMBEJD) showed. The group showed that basket prices over the last 12 months have increased by 10%, far outpacing headline inflation.

The average Household Food Basket increased by R98.08 (2.3%) month-on-month, and R400.83 (10.2%) year-on-year. In October 2021, the average Household Food Basket costs R4,317.56. “The rise in food prices in October is in line with our predictions and are set to continue into 2022,” the Maritzburg based group said.

It said that the massive electricity tariff hike of 14.59%, effected in June and July 2021, had to result in price hikes of goods and services down the line. These increases are now reflecting in higher food prices on supermarket shelves, it said.

“October further typically sees higher vegetable prices (specifically potatoes, butternut, and tomatoes) due to seasonal changes: potatoes, for example have been harvested in the Free State and Limpopo (unfavourable weather conditions resulted in lower yields), and the next crop in KZN will be ready from December.

“We are also seeing some anomalies in food prices across areas, with a spike in maize meal prices in parts of Joburg and Cape Town (South Africa has a bumper maize crop this year), including higher milk, amasi and egg prices, higher poultry and meat prices, and bread prices in some areas.”

Cape Town recorded a surge in prices in October month of R174.49 (4.2%) month-on-month. Cape Town prices have tended to be moderate over the past year, October has seen a shift which brings the total cost of the basket (R4,280.67) more in line with Joburg (R4,305.69) and Durban (R4,327.06) prices.

“Rising food prices, which are likely to continue into 2022, will put severe pressure on households whose incomes remain low through low baseline wages and low-level social grants and whilst jobs remain elusive. Monthly food expenses take up a large portion of income.

“Higher food prices, together with higher electricity prices and taxi fare hikes, are putting enormous pressure on the household purse and the family plate,” the PMBEJD group said.

The index tracks food price data from 44 supermarkets and 30 butcheries, in Johannesburg (Soweto, Alexandra, Tembisa and Hillbrow), Durban (KwaMashu, Umlazi, Isipingo, Durban CBD and Mtubatuba), Cape Town (Khayelitsha, Gugulethu, Philippi, Langa, Delft and Dunoon), Pietermaritzburg and Springbok (in the Northern Cape).

The total basket is well beyond the affordability thresholds of families living on low incomes, the group said, noting that the National Minimum Wage for this same period was R3,643.92.

• The Pietermaritzburg (KZN) basket was R4,189.88
• The Durban (KZN) basket was R4,327.06
• The Joburg (GP) basket was R4,305.69
• The Cape Town (WC) basket was R4,280.67
• The Springbok (NC) basket was R4,628.01

In October 2021, all household food baskets increased. Cape Town which has tended to be reasonably moderate over the past year, spiked in October by R174,49 or 4.2%, and now shows a similar year-on-year trend as all other areas.

Pietermaritzburg also spiked by R111.58 or 2.7% – this off the back of the July unrest which saw the basket move above R4,000 a month). Joburg and Durban also increased, similarly off the back of massive spikes in August 2021. Springbok, whilst its price increases are more moderate, continues to climb.

Household Food Baskets showing year-on-year and month-on-month

Household Food Baskets over the past year (October 2020 to October 2021)

Looking ahead,  the PMBEJD group said that the higher electricity tariffs, including the additional costs of sourcing backup supplies amid load shedding, load reduction and blackouts, will increase the cost of production, transport, and storage in 2022.

It added that the fuel price increases in November will run through the value chains making agricultural production and transport more expensive.

“The escalating crude oil price which is predicted to continue its surge will not only increase fuel prices but will increase the cost of many inputs into agriculture, processing, and packaging – crude oil is a core component in fertilizers and pesticides, plastics, and packaging. If the rand weakens, these costs will increase further,” it warned.

Further, South Africa’s railway system in many parts of the country is crumbling, and more of our goods and services are being transported by road, and therefore require fuel. Pressure on our highways will increase adding longer travel times on the road – this adds to the cost of fuel and cold storage, amongst others.

“The heavier traffic and heavier cargo further result in a deterioration of road surfaces and will require more maintenance, again longer time on the road, including damage to vehicles.”

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