The latest Household Affordability Index by the Pietermaritzburg Economic Justice & Dignity group (PMBEJD) shows that food prices have increased marginally in July – but basket prices have outpaced inflation by some margin over the last 11 months.
The civil society initiative found that its household food basket recorded a slight increase in price month-on-month, and remains at much higher levels than September 2020, when the basket was first compiled.
The basket was tracked at R9.20 (0.2%) more expensive than a month ago (June) at R4,137.43. Over the past 11 months, the cost of the average basket price increased by 7.3% or R281. Inflation over the same period was much lower, tracking between 3% and 5%.
The basket comprises 44 core food items most frequently purchased by lower-income households who make up the majority of households in the country.
Over the last month, the price of maize meal, rice, flour, and white sugar has come down. Cooking oil prices continue to be high, and potato, onion, and butternut prices increased – as did frozen chicken portions, eggs, and most meats. Bread prices increased marginally.
Of the 44 food items tracked by the group 21 increased in price, while 18 dropped in price month-on-month. With prices remaining relatively flat between June and July, only four items saw a shift in price above 10%.
June 2021 – July 2021 big changes:
- Potatoes: +15%
- Carrots: -12%
- Oranges: -17%
- Tomatoes: -18%
The table below outlines the price changes between June and July 2021:
Over the last 11 months, however, the picture is very different, with some items increasing by as much as 44%, and others dropping by as much as 49%. Only nine items have decreased in price since September 2020. Prices for 32 items have gone up – some quite significantly.
September 2020 – July 2021 big price changes:
- Sugar beans: +44%
- Gizzards: +38%
- Cooking oil: +35%
- Fish: +23%
- Beef liver: +23%
- Potatoes: +16%
- Beef: +18%
- Margarine: +13%
- Chicken livers: +12%
- Maize meal: +12%
- Samp: +10%
- Frozen chicken portions: +10%
- Green pepper: -15%
- Oranges: -49%
The table below outlines the price changes between September 2020 and June 2021.
Rising food prices come on top of other increases seen in July, such as electricity, water, and other rates and taxes. This has also been exacerbated by a degree of food scarcity in the wake of the mid-July riots and looting, which saw many grocery stores shut down or destroyed in KwaZulu Natal and parts of Gauteng.
The PMBEJD has long held that as long as wage increases and the National Minimum Wage are pegged at headline CPI, workers and grant beneficiaries will continue to fall short in making ends meet every month.
“The price of electricity went up by 14.59% in Pietermaritzburg, Durban and Johannesburg and 13,4% in Cape Town on the 1st of July. In Pietermaritzburg, workers are now paying R84 more for electricity than we did in June.
“The NMW increase of 4.5% resulted in a total monthly wage increase of R163.68 (on a 22- day working day month). The massive electricity hikes have eroded 51% of the NMW annual incremental increase implemented from the 1st of March 2021,” it said.
“The insufficient annual increase on the NMW means that workers are poorer this year than they were last year.”
The threat of civil unrest is still alive
Reflecting on the civil unrest and rioting that took place in July, the group said that while support for businesses and workers affected through grants is welcome, it does not and will not solve the problems that led to the events in the first place.
“It still feels to us that we are trying to pull blood out of a stone. Given the reality on the ground, it is unlikely that the relief measures announced by the president will be enough to prevent hunger and to quell civil disorder and put South Africa firmly on a path to recovery,” it said.
“We argued last month that in the minds of ordinary people, the right of hungry people to exist and to survive will become more important than any right of an individual or company to hold private property.
“The threat to state security and private property by hungry, desperate, and angry people is still very much alive.”
During the Covid crisis, the government implemented several support structures, including the R350 relief grant as well as top-ups to the child and senior grants. The PMBEJD said that families became dependent on these grants to survive.
However, only one of these has been re-instated – and with most of this support now gone, something needs to take its place.
Here, it said the Basic Income Grant would prove to be a good compromise – but only if it is big enough. It said the economic value of the grant would have to be more than R1,000 for it to be feasible.