Economics

Concerns over household food basket affordability

Statistics SA monthly consumer price inflation (CPI) for March 2021 showed a steadied month to month with CPI headline inflation higher at 3.2% year on year.

The main drivers of this increase were prices of food and alcohol beverages (NAB), contributing a staggering 31% to the CPI headline inflation.

According to the Bureau of Food and Agricultural Policy (BFAP), as of March 2021, the prices of food and non-alcoholic beverages (NAB) increased by “5.7% from March 2020 and by 0.8% from February 2021.”

BFAP’s simulation of the increased price showed that a four-member household with a dual minimum wage would not be able to afford a healthy food basket.

 “In March 2021, the monthly cost of the BFAP Thrifty Healthy Food Basket amounted to R2 945. This represents an increase of 8.6% (R232) from March 2020, and 1.4% (R42) from February 2021.”

In total, this meant that for the four-member household, their basic healthy food basket would have amounted to ±30% in March 2021.

Compounded by high levels of unemployment and malnutrition, BFAP further suggested that its simulation proofed that the cost of a basic healthy food basket excluded approximately half of South Africans.

According to senior agricultural economist at FNB Paul Makube, vegetables CPI jumped by 4.4% month to month and 3.4% y/y.

The front runners that contributed to the increased basic health food products was meat, fish, dairy and eggs, sugar rich food including oils and fats.

“Within the top 15 food expenditure items in South Africa, high annual inflation was observed for the following: Rice (+53%), eggs (+20%), wheat flour (+18%) sunflower oil (+18%), white bread (+15%), beef (e.g. beef mince +11%), pork (e.g. pork chops +30%), super maize meal (+12%), brown bread (+11%), white sugar (+9%) and long-life milk (+7%)” added BFAP.

Such food basket price increase was concerning among many consumers. Earlier during the year, consumers complained about the high abnormality of garlic and ginger which necessitated an investigation by the National Consumer Commission (NCC) on price gouging.

Interestingly, the NCC said the Consumer and Customer Protection and National Disaster Management Regulations and Directions, issued in terms of Regulation 350 of Government Notice 43116 contained a list of 22 essential products which supplier could not charge unfair or unreasonable price.

Agricultural products such as long life, cooking oils, rice, maize meal, pasta, sugar, wheat flour, frozen vegetables, frozen and fresh meat were part of the list.

BFAP’S report showed these essential foods also contributed to March food inflation particularly “oils and fats which increased by 13.4%, along with confectionary (+7.4%), milk, eggs and cheese (+7.2%), meat (+6.7%) and breads and cereals (4.9%).”

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