Some food prices in South Africa are expected to drop in the coming months, but not everyone is convinced that consumers will necessarily enjoy the benefits.
Economists reckon that food inflation in Mzansi has peaked at around 10% in July, that it will start easing now, and average out at about 7% for the year. Some items in the consumer food basket are even expected to become cheaper.
Mervyn Abrahams of the Pietermaritzburg Economic Justice & Dignity group (PMBEJD) echoes this and says there has already been a tapering off in month-to-month food price increases.
“In our previous affordability index we said that we are beginning to see what we hope is a stabilisation of prices. We base that on the fact that, over the last three months, the monthly increases have been lower,” Abraham says.
The cost of the average household food basket increased with 2.1% from March to April, in May the increase was 1.5% , and in June it was 1,7%. In July, the increase was only 1.3%.
What items are likely to be cheaper?
Specific foods are set to cost less soon. They include:
- Frozen chicken portions
- Gizzards
- Chicken livers
- Beef liver
- Wors
- Maize meal
- Cabbage
- Sugar beans
- Margarine
- Canned beans
- Rice
According to Abrahams, global commodity prices for grains and oils have also been declining. This global price relief is expected to filter through to the South African market at some stage.
Cost of living still too high
Despite the expected decrease on certain food items, PMBEJD is not convinced that it will benefit South African households.
“Yes, there is evidence to support what economists say. It’s a trend and we are closely monitoring any sudden spikes that might occur. But although food prices are moderating, people do not necessarily have more access to cash,” he says.
For the months of July and August there have been massive increases in electricity tariffs. Also, in some parts of Mzansi there have been reports of taxi fare increases.
These prices, Abrahams says, will not be coming down and will only add additional pressure on household budgets.
Even though food prices are stabilising, he believes the household food affordability crisis is still a reality due to the price of other household expenditures increasing. “The moderation is happening at a very high base level. Already, the basket is exceeding the national minimum wage.”
In July the cost of the average food basket was R4 748. This, while the national minimum wage is in the region of R3 800.
“You can’t look at food prices in isolation from other household expenditure. Food is bought last. [Consumers buy] electricity and water, [pay their] debt and then [buy] food. Families will still struggle to buy a basket of food.”
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