Triple blow for South Africans as food prices add to consumer burden

January 26, 2022 Geoffrey Bailey

The Pietermaritzburg Economic Justice and Dignity Group (PMBEJD) says consumers need to brace for a flurry of price hikes in 2022 – including food items that have already climbed far above headline inflation.

The group’s monthly Household Affordability Index shows that food prices are up 9% over the last 12 months, with a significant jump between December 2021 and January 2022.

With food inflation already well above inflation, the PMBEJD warned that 2022 sets the stage for further price hikes, setting up a triple-blow for consumers who have to contend with:

Petrol prices likely increasing based on rising crude oil prices;
Eskom applying for a 20.5% hike in tariffs;
Food prices being driven up by both these costs, as well as local climatic and agricultural constraints.

The PMBEJD warned that food inflation, particularly for items and in areas that affect the country’s poorest, currently far outstrips headline inflation and food inflation figures reported by Stats SA.

This is particularly concerning as most salary and wage increases – including the national minimum wage – are based on CPI, which is leading to an imbalance in what people are paid, and what it costs for them to survive.

“The national minimum wage for a General Worker in January 2022 is R3,643.92. Transport to work and back will cost a worker an average of R1,344 (36.9% of NMW), and electricity an average of R731.50 (20.1% of NMW).

“Together, transport and electricity – both non-negotiable expenses – take up 57% (R2,075.50) of the NMW, leaving R1,568.42 to secure all other household expenses. If all this money went to food, then for a family of 4.5, it would provide R348.54 per person per month. This is 44% below the Food Poverty Line of R624 per person per month,” the group said.

PMBEJD said that the government’s recommendation that the national minimum wage be increased by CPI+1% from March 2022 will not cover the rising costs.

“The proposal on the table for the NMW increase in March 2022 is CPI+1% – even less than last year, which was a +1.5%. Increments that are linked to inflation for the previous year and not the projected inflation for the year ahead deepens worker poverty,” it said.

Rising food prices

According to the PMBEJD index, the average cost of the Household Food Basket in January 2022 is at R4,401.02. The basket comprises 44 core food items most frequently purchased by lower-income households, who make up most households in the country.

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

Food prices December 2021 to January 2022 – big changes

Month on month, the price increase was 2.9% from December 2021. Of the 44 food items tracked, 31 increased in price, seven decreased, and six stayed the same.

PMBEJD said that a 2.9% month-to-month spike is high. In monetary terms, it averaged R125.08. The year-on-year price of the Household Food Basket – January 2021 to January 2022 – stands at an average of 8.6%, with a rand-value increase of R349.82.

Oranges: +40%
Tomatoes: +27%
Bananas: +11%
Carrots: +10%
Stock cubes: +10%

Food prices January 2021 to January 2022 – big changes

Year on year, food prices rose 8.6% (CPI: 5.9%), with 34 of 44 tracked food items increasing in price. Nine items came down in price, and one item remained the same.

Tomatoes: +45%
Beef liver: +37%
Cooking oil: +30%
Butternut: +26%
Gizzards: +24%
Chicken livers: +18%
Frozen chicken portions: +17%
Eggs: +13%
Apples: +13%
Polony: +13%
Beef: +12%
Wors: +12%
Sugar beans: +10%
Tinned pilchards: +10%
Oranges: -10%

Regionally, Joburg, Durban and Pietermaritzburg are now showing annualised inflation of over 9%, the group said. Joburg food inflation is at 9.7% (R391.69), Durban at 9.6% (R393.59); and Pietermaritzburg at 9.8% (R380,86). Cape Town is marginally lower at 8.8% (R346.80).