The latest household affordability index from the Pietermaritzburg Economic Justice & Dignity (PMBEJD) group shows that food prices increased slightly in December 2021, after a slight drop in prices in November.
Data from the civil society initiative, however, showed that, on a year-over-year basis, basket prices rose 6.8%, exceeding headline inflation.
The group’s food basket totaled R4,275.94 in December, up R3.50 (0.01%) from R4,272.44 in November – indicating relatively stable prices over the past month. However, the same basket in December 2020 was 4,002.42 Rand, which means households are paying 273.52 Rand more (6.8%) than a year ago.
Statistics South Africa‘s latest consumer price index for October 2021 shows headline inflation to be 5%, and for the lowest spending quintiles 1 to 3 it is 6.5%, 6% and 5.2% respectively. The food CPI inflation is 6.7%. The producer price index for October 2021 shows that agricultural inflation was 8.7%.
The main point of contention regarding the inflation figures is that wages and salaries are negotiated based on headline inflation. The national minimum wage is often only increased by the aggregate CPI, and social allowances have recently been increased at rates well below the CPI.
This creates a scenario where the amount entering does not match the increase in the basic cost of living, pushing the poorest into poverty.
An example of this can be seen with the recent recommendations of the National Minimum Wage Commission that the NMW be increased by CPI + 1% for 2022. On paper, this appears to be an increase greater than inflation – however, if l The CPI for the poorest households is considered to be 6.5%, which is a lower wage, in real terms.
Considering PMBEJD data, even though the wage increase was at CPI + 1.5% to correct this, food inflation – at 6.8% – is still higher than that.
The basket includes 44 basic food items most frequently purchased by low-income households, which constitute the majority of households in the country. Seventeen of 44 foods have fallen in price in the past month; 24 foods increased and three items remained unchanged.
These were the most significant changes, when prices increased or decreased by 10% or more.
Food prices from November 2021 to December 2021 – big changes
- Oranges: + 19%
- Carrots: + 17%
- Potatoes: -16%
- Butternut: -21%
Food prices December 2020 to December 2021 – big changes
Year-over-year changes are larger, according to group data, with the same basket costing 6.8% more – more than headline inflation.
Consumers pay more almost everywhere, with only eight of 44 items falling in price, and only one significantly (above 10%). In contrast, the price of 35 food items rose, 26 of which were above headline inflation.
Here are the most significant changes, greater than 10%:
- Cooking oil: + 30%
- Gizzards: + 31%
- Liver of beef: + 30%
- Poultry livers: + 22%
- Beef: + 17%
- Sugar grains: + 17%
- Spinach: + 15%
- Fish: + 14%
- Apples: + 13%
- Frozen Chicken Portions: + 12%
- Eggs: + 11%
- Worse : + 11%
- Margarine: + 11%
- Samp: + 10%
- Canned beans: + 10%
- Oranges: -31%
At the regional level, the difference in the cost of the total household food basket in Johannesburg, Durban and Cape Town is constant at around Â± R150. Springbok and Pietermaritzburg tend to be outliers in the data (Springbok being the highest and Pietermaritzburg the lowest).
Read: National Minimum Wage Commission recommends 20% increase for domestic workers in 2022