Food prices expected to rise

Author: businesstech.co.za

The latest Household Affordability Index by the Pietermaritzburg Economic Justice & Dignity group (PMBEJD) shows that food prices increased in April 2022.

The group recorded its Household Food Basket at R4,542.93 in April 2022. Month-on-month, the average cost of the basket increased by R92.84 (2.9%), from R4,450.09 in March 2022. Year-on-year, basket increased by R344.00 (8.2%), from R4,198.93 in April 2021.

The year-on-year increase outstrips headline inflation, and even food inflation tracked by Stats SA. The latest Consumer Price Index for March 2022 shows that headline inflation is 5.9%, and food inflation was recorded at 6.7%.

According to the PMBEJD, the cost of the household food basket continues to rise due to both global and local factors, with worse still to come.

The ongoing war in Ukraine continues to be the biggest global driver of higher food prices, with knock-on effects on energy price – particularly the high brent crude oil price, which leads to higher fuel prices. The weaker rand is also a factor.

“Much higher production and logistical costs will continue to drive prices upwards and are likely to continue rising for the rest of 2022,” the PMBEJD said. The recent flooding in KwaZulu-Natal was not accounted for in the group’s April data – as prices were collected before the rains – but the natural disaster will also undoubtedly add to increases going forward.

The group said that the majority of households are being forced to cut their shopping lists down to the basics. Shoppers have expressed frustration at having to shop around and haggle for the best possible price for essential items.

“At the retail level, supermarkets have responded by rounding on the higher food prices by bringing in a lot of new cheaper brands, offering shop brands, offering specials, offering ‘combos’, offering store cards, etc,” the group said.

“We asked women if these supermarket specials and new offerings help in being able to buy the food they need to buy. The response is mostly yes. The supermarket offerings of savings do seem to help – but nobody really knows the real fair cost of food now.”

Food prices

The PMBEJD basket comprises 44 core food items most frequently purchased by lower-income households, who make up most households in the country.

Year on year, only six of these 44 items have come down in price, with one remaining unchanged. The balance – 37 items – all increased in price over the last 12 months.

These were the most significant changes, where prices increased or declined by 10% or more.

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