The latest Household Affordability Index by the Pietermaritzburg Economic Justice & Dignity group (PMBEJD) shows that food prices increased slightly in December 2021, following a small drop in prices in November.
The civil society initiative’s data showed that year-on-year, however, basket prices have increased by 6.8%, outstripping headline inflation.
The group’s food basket totalled R4,275.94 in December, up R3.50 (0.01%) from R4,272.44 in November – pointing to relatively flat prices over the last month. However, the same basket in December 2020 was R4,002.42, meaning households are paying R273.52 more (6.8%) than a year ago.
Statistics South Africa’s latest Consumer Price Index for October 2021 shows that headline inflation is 5%, and for the lowest expenditure quintiles 1-3, it is 6.5%, 6%, and 5.2% respectively. CPI Food inflation is 6.7%. The Producer Price Index for October 2021 shows that agricultural inflation was 8.7%.
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.
An example of this can be seen with the recent recommendations from the National Minimum Wage Commission that the NMW be increased by CPI+1% for 2022. On paper, this appears to be an above-inflation increase – however, when considering that CPI for poorer households is at 6.5%, this is a lower wage, in real terms.
Given the PMBEJD’s data, even if the wage increase were at CPI+1.5% to correct this, food inflation – at 6.8% – is still even higher than that.
The basket comprises 44 core food items most frequently purchased by lower-income households, who make up most households in the country. Seventeen of the 44 foods came down in price over the last month; 24 foods increased, and three items remained flat.
These were the most significant changes, where prices increased or declined by 10% or more.
Food prices November 2021 to December 2021 – big changes
- Oranges: +19%
- Carrots: +17%
- Potatoes: -16%
- Butternut: -21%
Food prices December 2020 to December 2021 – big changes
Year on year changes are more significant, the group’s data shows, with the same basket costing 6.8% more – higher than headline inflation.
Consumers are paying more almost across the board, with only eight of 44 items coming down in price, and only one significantly (above 10%). On the opposite end, 35 food items went up in price, 26 of which were above headline inflation.
These are the most significant changes, above 10%:
- Cooking oil: +30%
- Gizzards: +31%
- Beef liver: +30%
- Chicken livers: +22%
- Beef: +17%
- Sugar beans: +17%
- Spinach: +15%
- Fish: +14%
- Apples: +13%
- Frozen chicken portions: +12%
- Eggs: +11%
- Wors: +11%
- Margarine: +11%
- Samp: +10%
- Canned beans: +10%
- Oranges: -31%
Regionally, 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 highest, and Pietermaritzburg being lowest).