Ina Opperman
Business Journalist
6 minute read
30 Jul 2022
4:23 pm

Latest food basket prices provide little good news for the poor, hungry

Ina Opperman

Although food prices seem to be stabilising, huge increases in electricity and transport will not mean more food on the plates for low-income households.

Image: iStock

The food basket results for July doesn’t bode well for the country’s poor and hungry, with the basket costing R611.44 more than in July last year and R60.06 more than in June this year.

This means that low-income consumers have to cut nutritious food from their shopping lists to also afford transport and electricity.

According to the July 2022 Household Affordability Index survey run by the Pietermaritzburg Economic Justice and Dignity group, the average cost of the basket was R4,748.87 in July. In June it was R4,688.81 and in July last year R4,137.43.

The index tracks food price data from 44 supermarkets and 30 butcheries, in low-income communities in Johannesburg, Durban, Cape Town, Pietermaritzburg and Springbok. It includes the foods and the volumes that women living in a family of seven members (an average low-income household size) says they typically try and secure each month.

Although the price of the average basket continues to increase, the PMBEJD says data over the past three months is beginning to show a moderation in prices. “This month, although still increasing by 1.3%, the higher increase for the basket was driven by a spike in the Cape Town basket which increased by R157.41, driving the monthly increase on the average basket up by approximately R20.”   

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Commodity prices stabilising

The group says indications are that global commodity prices of grains and oilseeds, as well as crude oil, are stabilising which means that imported inflation is likely to be lower and this should start filtering through.

“Lower fuel prices are also on the cards for next month, but while we may start to see food prices stabilising, it is not clear when these prices will begin to fall.”   

The sad thing is that any moderation in food prices will not mean low-income consumers will have more money in their pockets as July and August will see increases in taxi fares and higher electricity tariffs. The PMBEJD says pressures will therefore remain on households’ ability to afford their basic expenditure for the near future.

Food basket prices increased in Johannesburg by R22.33 compared to June, Durban by R69.10 and Cape Town by R157.41. The price decreased in Springbok by R127.32 and by R37.58 in Pietermaritzburg compared to June this year.

A total of 31 of the 44 foods in the total basket increased in price, with quite erratic price fluctuations this month of individual foods in the basket across areas. “Generally, the trend was that the major staple foods, maize meal, rice, samp, flour, sugar and potatoes, saw increases. Cooking oil prices are stabilising in all areas except Johannesburg, which saw a further 5% increase,” the PMBEJD says.

Vegetables were also more expensive in July, with tomatoes, carrots, butternut, spinach and green peppers costing more, while the price of cabbage decreased. Bananas and apples were also more expensive, while oranges cost less.

Bread prices were down except for a steep jump of 5% in Cape Town. All meat prices also came down, except beef which increased marginally (by 1%), frozen chicken portions that increased marginally in all areas, except Durban and Springbok, where they came down by 6% and pushed the average down to -2% and fish, which increased by 7%.

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Sharp spike in Cape Town prices

The PMBEJD says the basket prices in Cape Town, which tend to increase at much gentler levels than other areas, saw a much steeper hike in prices and across more foods in the basket, compared to other areas.

The group also points out that the price of the Durban basket is consistently high. “Monthly increases are typically in the region of R60 to R100. The escalation of the Durban basket over the past year is still partly driven by the consequences of the July 2021 unrest, where residents still have to buy their groceries in more expensive supermarkets, further from where they live.”

The logistic obstacles in the food value chains, continuing from last year’s unrest, as well as the more current transport problems of road blockages/protests/ongoing road maintenance and traffic disruptions on the major Johannesburg to Durban highway routes, including still dealing with the recent flooding, also influences the food prices in the region.

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More expensive transport and electricity

In addition, municipalities increased the price of prepaid electricity in July, on average by 7.47%. In Pietermaritzburg, 350kWh of prepaid electricity cost R56 more, up from R731.50 to R787.50 (from R2.09/kWh to R2.25/kWh).

“Transport fare increases are porous, with some already into effect and some yet to increase next month. General fare price increases, where they have been implemented, are up R2 to R3 and R5 per local trip. Fare increases hurt the pockets of workers and must be absorbed as people have to get to work.”

The group says workers still live in the places where apartheid left them far away from work and little has changed regarding apartheid geography. Taxi fares eat an enormous hole in workers pockets.

“In July 2022, with 21 working days, the maximum national minimum wage for a general worker is R3,895.92. On our calculations, using Pietermaritzburg-based figures and the national figure for a minimum nutritional basket of food for a family of four (in July this was R3,229.49), puts electricity (the 7.47% increase) and transport (increase not yet effected in Pietermaritzburg), as taking up as much as half a worker’s wage (54.7% or R2,131.50).” 

The group points out that low-income consumers only buy food after paying for transport and electricity, leaving only R1,764.42 for food and everything else and therefore the PMBEJD calculates that workers’ families underspent by a minimum of 45.4% on food in July.

ALSO READ: Consumers getting close to affordability tipping point

Little nutritious food for children

It now costs R100 more to feed a child a basic nutritious diet than it did a year ago. In July 2022, the average cost to feed a child a basic nutritious diet was R824.14. In July 2022, the child support grant of R480 was 23% below the food poverty line of R624 and 42% below the average cost to feed a child a basic nutritious diet (R824.14).

“We are starting to get into dangerous territory. Given what we face now, particularly knowing that the child support grant is set below the food poverty line, it would be prudent for government to review the annual increment of R20 and raise it so that mothers are able to better absorb the food price shocks and feed their children properly,” the PMBEJD says.