{"id":707316,"date":"2023-07-27T17:00:00","date_gmt":"2023-07-27T15:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=707316"},"modified":"2023-07-27T15:12:18","modified_gmt":"2023-07-27T13:12:18","slug":"this-is-how-much-south-africas-middle-class-spends-on-groceries","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/707316\/this-is-how-much-south-africas-middle-class-spends-on-groceries\/","title":{"rendered":"This is how much South Africa’s middle class spends on groceries"},"content":{"rendered":"\n

South Africans are paying roughly a third of their income on food, with rising prices hurting consumers’ wallets. <\/p>\n\n\n\n

According to Stats SA, Consumer Price Inflation dropped from 6.3% in May to 5.4% in June. Although CPI is now within the South African Reserve Bank’s target range of 3% to 6%, food inflation remains incredibly high. <\/p>\n\n\n\n

Food and non-alcoholic beverages declined from 11.9% in May to 11.0% in June. Despite the drop, food inflation has remained high for several months. <\/p>\n\n\n\n

According to Deloitte’s South Africa economic outlook for July 2023, food prices in South Africa are not immune to external developments, with supply chain disruptions and geopolitical events, like the Russia-Ukraine war, having a major effect on South Africa’s overall inflation. <\/p>\n\n\n\n

Although South Africa has a well-developed agricultural sector, the report said that the country relies on certain imports of agricultural products and inputs that expose the country to global commodity-price changes. <\/p>\n\n\n\n

For example, South Africa imports 50% of its what and 80% of its fertilizer – the domestic fertilizer price for potassium chloride climbed by almost 180% from May 2021 to May 2022. <\/p>\n\n\n\n

The report added that the high import dependency on certain agricultural products and the weak rand have caused increased inflation. <\/p>\n\n\n\n

Intensified load shedding has also driven prices higher, as farmers and other key players in the food supply chain have had to resort to expensive energy alternatives, with these additional costs passed on to the consumer. <\/p>\n\n\n

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How much are people paying <\/strong><\/p>\n\n\n\n

As per Stats SA data, the poorer households tend to spend the largest share of their money on groceries. <\/p>\n\n\n\n

Poor households – those that spend less than R20,140 per year (R1,680 per month) – spend 50% of their budgets on food and non-alcoholic beverages, whereas wealthy households – those that spend more than R312,247 per year (R26,000 per month) – spend only 11% of their budgets on food. <\/p>\n\n\n\n

Those in Stats SA’s middle class – those who spend between R65,214 to R84,698 per year (R5,500 to R7,000 per month) – spend roughly 34% of their salary on food. <\/p>\n\n\n\n

Thus, those in Stats SA’s middle class spend the largest amount of their budgets on food – slightly more than the 30% for housing and utilities: <\/p>\n\n\n

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Possible relief on the way <\/strong><\/p>\n\n\n\n

Many economists have predicted that food inflation should start ticking downwards, and recent global hits to the supply chain should not affect that. <\/p>\n\n\n\n

Global agriculture has faced new risks recently, with India banning rice exports and Russia terminating the Black Sea Grain Deal that allowed for grain and oilseed exports from Ukraine.<\/p>\n\n\n\n

However, Wandile Sihlobo<\/a>, the Chief Economist of the Agricultural Business Chamber of South Africa, said that these concerns should not have a serious effect on food prices in South Africa. <\/p>\n\n\n\n

Although there are still risks to prices as South Africa imports millions of tonnes of rice and wheat, Sihlobo said that South Africans should not be concerned as there have been no significant increases in international, domestic maize and wheat prices. <\/p>\n\n\n\n

\u201cWhether these price gains are sustained will depend on the Black Sea Grain Initiative developments and India\u2019s rice exports. Importantly, there is roughly a lag between three to five months between the price changes at farm and retail levels,\u201d he added.<\/p>\n\n\n\n

\u201cHence, I expect the prices of grain-related products in the inflation basket to maintain a softening path regardless of the recent disruption in grain prices.\u201d<\/p>\n\n\n\n

In addition, he downplayed the risks of the expected El Nino period that will likely hit South Africa, which will result in less rainfall and higher temperatures. <\/p>\n\n\n\n

He said that the upcoming El Nino period should not be as harsh on agriculture as the El Nino period seen in 2015\/16. <\/p>\n\n\n\n

\u201cWe are coming from four consecutive rainy seasons that have significantly improved soil moisture. Hence, we remain positive that the upcoming season will likely be decent, although down from the current large harvest.” <\/p>\n\n\n\n

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Read: R1.3 billion load shedding bill for South Africa\u2019s biggest retailer<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

As salary increases, the proportional spend on groceries declines – new data from Deloitte shows. <\/p>\n","protected":false},"author":95,"featured_media":707342,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[181,26],"class_list":["post-707316","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-deloitte","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/707316","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=707316"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/707316\/revisions"}],"predecessor-version":[{"id":707378,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/707316\/revisions\/707378"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/707342"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=707316"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=707316"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=707316"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}