The Pietermaritzburg Economic Justice and Dignity Group (PMBEJD) has questioned why food prices have remained stubbornly high despite favourable economic conditions.
The Pietermaritzburg-based non-profit organisation said food prices are not coming down despite there being a marked improvement in input costs due to fuel price decreases, over 200 days of no load shedding, an interest rate cut and a stronger rand.
The Competition Commission of South Africa, which released their Essential Food Price Monitoring report earlier this month, also agreed saying they had noted high food prices.
Mervyn Abrahams, programme co-ordinator of the PMBEJD, said it was concerning that food prices were not coming down.
“Input costs have come down, but food prices are still high. When fuel prices go up, we immediately see an impact and food prices go up. There doesn’t seem to be the same correlation when fuel goes down. Despite five consecutive months of fuel price decreases, a 25 basis points interest rate cut, and over 200 days of no load shedding, food prices remain high.”
Abrahams added that some food prices were showing increases for the August and September periods.
“We have noted increases in food items such as maize meal, potatoes, cake flour, oil, samp, and brown bread, which is concerning. We do feel that we need to know why these prices are not coming down.”
Siyabulela Makunga, spokesperson for the Competition Commission of South Africa, said: “Our observations are that there are several positive signs of easing food cost pressures throughout the economy, including the relaxation of load shedding, the strengthening of the Rand against the US dollar, and decreasing fuel prices.”
Makunga added that these factors have been regularly cited as among the leading cost drivers that have kept food prices higher for longer.
“If these factors continue to ease, their importance on food prices should also subside, resulting in the reduction of food prices. However, the commission has observed that prices remain high and are increasing at a rate that is unaffordable for low-income households.”
The Commission’s Essential Food Price Monitoring report said the last two to three years has been characterised by a cost-of-living crisis that had stretched budgets and compromised the well-being of many households.
“The Commission has continued to monitor the price of essential food items identified by this, including the price of sunflower oil, brown bread, eggs, chicken, maize meal, and canned pilchards.
“The producer-to-retail spread for eggs was fairly stable until the avian flu outbreak in 2023. At this point, there was a sharp increase in producer prices.
“Producer prices remained elevated in 2024 but fell slightly from their peak of R17.07 in November 2023 to R14.55 in March 2024.”
The report added that rising sunflower seed prices are the direct consequence of the mid-summer drought.
“The lower producer price of sunflower oil since September 2023 has still not translated into lower retail prices. The average retail price of sunflower oil in the last six months has remained fairly stable while producer prices have declined.”
The report said there were concerning signs that maize meal was once again facing increasing prices as the effects of the drought had started trickling down to prices.
According to the report, there was a considerable spike in the farm gate price of white maize in March 2024, a sharp increase in the producer price of maize meal, albeit to a lesser extent and at the retail level, maize prices have increased from R36.70 in January 2024 to R38.34 in June 2024.
Evashnee Naidoo, Black Sash KZN regional manager, agreed that food prices had remained high.
“Despite the nominal increase to social grants in October, these increases do not translate into savings at retailers when having to purchase food, especially when basic items are found to be increasing month on month. We call on retailers to stabilise food prices and especially basic food items to be reduced to make them affordable for the poorest of the poor.”
Dr Kelle Howson, a senior research consultant at the Institute for Economic Justice, said the lowest income earners spend the highest proportion of their income on food.
“So food price inflation hurts the poorest the hardest, and this is indicated by the increasing amount of food insecurity in South Africa.”
The Mercury