Food prices jumped by 50% from September 2020 to September 2024 (Dwayne Senior/Bloomberg via Getty Images)
South Africans have to tighten their belts as they endure the continuing cost of living crisis, pushing food prices —- which jumped by 50% from September 2020 to September 2024 — to unaffordable levels.
According to the Competition Commission‘s latest Essential Food Pricing Monitoring report, there was a steep rise in the cost of a food basket that included maize meal, rice, flour, samp, potatoes, bread, and oil — all of which are monitored by the Pietermaritzburg Economic Justice & Dignity Group.
The report released on Friday noted that despite several positive signs of easing food cost pressures throughout the economy — such as the relaxation of rolling blackouts, the strengthening of the rand against the US dollar, and decreasing fuel prices — the price of food remains high.
The commission’s report stated that prices remained high and are increasing at a rate that is unaffordable for households earning the national minimum wage.
The minimum wage earned a worker R3 653.76 in October 2020, resulting in a R262.96 or 7% shortfall between employee earnings and the amount of the monitored grocery basket. The same worker would have earned R 4633.76 minimum wage in May 2024, resulting in a R696.86 or 13% shortfall.
Siyabulela Makunga, the spokesperson of the commission, said this edition of the food pricing report found that easing cost pressures have been slow to translate to lowering food prices in essential food value chains.
“As an example, if one looks at the steep decline in average producer price of cooking oil, it has not translated into lower average retail prices for these essential food products. Consequently, the producer to retail spread for cooking oil is now above the levels seen immediately before the onset of the war in Ukraine.”
The commission said it needed to ensure that the easing food cost pressures rapidly reflected in lower retail food prices rather than an outcome where processors and retailers were slow to pass through cost reductions to consumers.
To illustrate this point, the commission found that a steep decline in the average producer price of cooking oil since September 2023 had not translated into lower average retail prices for consumers.
Another example is the price of poultry, which skyrocketed after last year’s avian or bird-flu outbreak crippled stock from producers, has struggled to fall back to levels seen before the disease was most rife.
The commission said avian flu had a devastating effect on the local poultry market, resulting in 8.5 million chickens being culled between April and November 2023.
Retail prices for eggs remained considerably above pre-avian flu outbreak levels, it added.
“The culling caused large financial losses and some business closures in the industry.”
The latest inflation print showed that food inclination edged higher in August.
While consumer inflation slowed for a third consecutive month, cooling to 4.4% in August from 4.6% in July, food inflation rose to 4.7% from 4.5% in July, according to Statistics South Africa.
The product groups that registered higher annual rates included bread and cereals; meat; fish; milk, eggs and cheese; oils and fats, as well as vegetables.