The latest Household Affordability Index by the Pietermaritzburg Economic Justice & Dignity group (PMBEJD) shows that food prices climbed sharply in April, following a slight decline in March.
The civil society initiative found that all household food baskets in the areas it covers – being Joburg, Durban, Cape Town, Springbok and Pietermaritzburg – increased month-on-month, and are now at the highest level since September 2020, when the basket was first compiled.
Overall, the basket is now R160 more expensive than in March 2021 – an increase of 3.9% – at R4,198.93. The basket comprises 44 core food items most frequently purchased by lower-income households who make up the majority of households in the country.
The basket has seen a dramatic increase in price since the basket was first introduced in September 2020, having increased in price by 9% over the eight month period.
Making matters far worse, the PMBEJD said, was the fact that the most recent prices were recorded before the April fuel price hike and increased fuel levies came into effect on 7 April 2021, and before the new electricity tariff of 15.63% came into effect for Eskom customers.
“Fuel prices and electricity prices run through the entire economy and the food value chains. The full impact of these increases has yet to come through. Based on the current upward trend in food prices, we predict that with the increases in fuel and electricity, that food prices will increase beyond 10% for the 2021 term,” it said.
As a result of these rising prices, the group said its research – which includes interviews with the people who do the monthly shopping in South African households – shows that shoppers are now moving to buy only critical foods, and seek out the cheapest available options.
The PMBEJD found that 36 out of the 44 foods tracked in the average household food basket went up in April.
Some of the price increases were significant – above 10% – with a 33% increase seen in the price of tomatoes. The biggest increases were seen in:
- Tomatoes: +33%
- Butternut: +19%
- Bananas: +16%
- Cooking oil: +14%
- Cabbage: +13%
- Carrots: +12%
- Gizzards: +12%
- Onions: +12%
- Wors: +10%
Only seven food items saw a price drop – only two of which were bigger than 10%. These are:
- Apples: – 16%
- Oranges: -16%
- Tea: -4%
- Polony: -2%
- Canned beans: -1%
- Stock cubes: -1%
- White bread: -1%
Brown bread remained unchanged.
Food items are more expensive in Joburg when compared to other main centres like Durban and Cape Town. Joburg also saw the biggest increases in prices over the last month, with food prices in the basket rising 6.2% – against consumer inflation of 3.2% over the same period.
Over a longer time-frame, the eight month period when the basked was first introduced – prices have increased between 5.6% and 11.3%.
The PMBEJD previously warned that the government must intervene on escalating food prices and other factors that impact them, or risk civil unrest among an increasingly “hungry population”.
It said that headline inflation, which is back within the 3% to 6% range in April, is used as the starting point in many wage negotiations, but does not reflect the rising prices of core needs like food.
Low inflation in recent months has been driven by big purchases – appliances and the like – which are not typical repeat expenses. This gives the impression that inflation is low across the board, but in reality core purchases like food are rising rapidly.
“(CPI) appears to kick in sharply when wage levels are being negotiated. In these instances, the Reserve Bank calls out ‘unreasonable’ wage demands. The Reserve Bank however seems not to display this level of passion and consistency in intervening to keep the level of inflation on essential goods and services for low-income households down,” it said.
For example, the group said that there appears to be no intervention from the Reserve Bank when Eskom decides to increase electricity tariffs by 15.63%, or when food prices rocket to above 10%, or when public transport taxi fares increase by 7% or even the 25% seen in Gauteng last year.
It said that if core goods and services are rising far above inflation, while low headline inflation is used an excuse by employers to keep wage increases low, it’s local workers who carry the burden and end up subsidising higher income earners and employers.
Failure to rectify the situation could lead to civil unrest, the group said. “The triggers, we have long predicted – where material conditions just become too intolerable and where one person, two people, three people start to say, ‘we cannot and will not continue to live under such conditions’ – will start multiplying.
“The public mood seems to us to be shifting rapidly. It seems to us that much of our future rests in the decisions that will be taken by hungry men and women,” it said.