While consumers should be seeing a drop in prices on some of their favourite vegetables in supermarkets, national minimum wage earners continue to struggle with securing even their most basic expenses.
According to the Bureau for Food and Agricultural Policy’s (BFAP) latest Food Inflation Brief, food prices continued to slow down in June 2023 from May as indicated by the FAO Food Price Index. Interesting movements have especially been observed in Mzansi’s fresh produce markets
“Lower throughput of potatoes, onions and to a lesser extent tomatoes were recorded on the municipal markets for May 2023 compared to 12 months prior, while 5% more cabbage was sold on the 20 municipal markets. However, for June 2023, 24% more cabbage was sold, resulting in a price decrease,” BFAP’s data-driven report stated.
Tomatoes followed a similar trajectory, as volume on the market increased. As a result of higher volumes and greater quantity on hand, tomato prices dropped by 23% in June 2023 compared to June 2022.
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Tomato prices down, potatoes up
Meanwhile, external factors contributed to onions’ bullish run of the past year where prices remain high despite no major change in sales volumes.
Considering the month of June in isolation, there are some indications of a slowdown and normalisation of prices over the next couple of months.
“The first indicator is that the quantity on hand – unsold volumes in a given week – has increased considerably in June 2023 compared to a month prior. The second indicator is that month-on-month, prices dropped by 20%, on average.” BFAP said.
In contrast to the downward price movements observed on cabbage, tomatoes, and onions, the potato sales prices on the municipal markets were 59% higher than a year ago and 15% higher than a month ago.
These price movements come as similar volumes to a year ago and a month ago were sold on the market.
“The quantity on hand was 25% lower in June 2023 than 12 months prior, which is indicative of produce moving faster through the markets, despite no indications of larger volumes,” BFAP said.
If historic trends are anything to go by, potato prices should start declining no later than September 2023. “If consumers aren’t observing similar trends in the supermarkets, it could be the result of contracted prices with direct suppliers being upheld or that supermarkets are recovering some incurred costs before passing the applicable savings on to consumers,” BFAP explained.
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Hardly any relief for minimum wage earners
For minimum wage earners, the picture is vastly different. According to the Pietermaritzburg Economic Justice and Dignity Group (PMBJ), workers paid at the level of the national minimum wage (NMW) cannot meet the three core household expenses (Transport to work, prepaid electricity and food) on a minimum wage.
“The national minimum wage is a poverty wage – it hurts workers, it reduces productivity in the workplace, and slows down economic growth,” said PMBJ.
The maximum wage of R4 270.56 in June 2023 when disbursed in a family of 4 persons is R1 067.64. This is below the upper-bound poverty line of R1 417 per capita per month.
Workers are getting poorer each year
“Set at such a low level, the NMW works to institutionalise the low-baseline wage regime and lock millions of workers into poverty. Workers on the NMW are getting poorer and poorer each year.
PMBJ explained the minimum shortfall on food for a family is 43,8% in June 2023. After securing transport and electricity, workers are left with R1 971.06.
If all of this money went to food, then for a family of four, it would provide R492.76 per person per month, while the food poverty line is R663.
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