Food price reality check for South Africa

The latest food basket data from the Pietermaritzburg Economic Justice and Dignity group (PMBEJD) shows that food prices in South Africa have come down since January 2024 – but it warns that it’s still too soon to celebrate.

The group’s monthly Household Food Basket dropped by R47.56 between January and February 2024, amounting to R5,277.30.

This represents a 0.9% decline in the total price – although it remains 7.1% higher (or R348.96 more) than in February 2023.

The PMBEJD said that the drop in pricing is in line with historical trends, where prices tend to decrease in February before picking up again in March.

“From October 2023, we had started to see a slight downward trend in food prices, with January 2024 presenting a blip – albeit consistent with past trends.

“Food price fluctuations are unpredictable and we do not yet know whether the downward trajectory we saw from October 2023 will continue into the new year, or if prices are set to rise in the coming months, consistently with previous years,” it said.

“It is our assessment, however, that food inflation may be more subdued this year compared to the past two years, whilst still remaining high.”

The PMBEJD noted that it’s not necessarily the fluctuations in food pricing that is the main problem for households in South Africa, but rather that the overall pricing relative to income levels is still too high.

“This presents families with a household affordability crisis because the household purse has to cover a myriad of different expenses, food being just one of these expenses,” it said.

Food prices in South Africa

The PMBEJD’s basket comprises 44 food items that most households in South Africa would purchase in a typical month. While this reflects a lower-income basket, this is what the majority of households would look at.

Across the 44 food items tracked by the group, seven have come down in price, year-on-year, showing increased levels of disinflation for key foods. Onions (-29%) and cooking oil (-13%) recorded significant decreases.

However, the PMBEJD said it needs to be understood in the context of pricing coming off a high base.

Most food items are still showing high levels of inflation, with 19 recording double-digit price increases – and six of these are over 20%:

• Oranges: +75%
• Eggs: +38%
• Rice: +27%
• Potatoes: +26%
• Carrots: +21%
• Butternut: +20%

The latest inflation data from Stats SA shows that food inflation continued to decline in the first month of 2024.

Annual inflation for food and non-alcoholic beverages decreased from 8.5% in December to 7.2% in January, with all sub-categories, except for sugar, sweets & desserts, oils & fats, and cold beverages, seeing a decline.

The annual rate for sugar, sweets & desserts increased from 17.9% in December to 18.5% in January, with the annual increase in white sugar (20.1% in December to 21.2% in January) driving the upward momentum.

Prices at factories were also elevated, with the December producer price index (PPI) showing sugar inflation at 23.5%, with raw cane sugar growing by 36.7% and refined sugar by 18.8% over the last year.

Annual inflation for bread & cereal products reduced from 7.5% in December to 6.5% in January, while meat inflation also softened from 3.9% to 2.2%.

Read: Inflation ticks higher – bad news for eating out in South Africa