Economic justice group PMBEJD says, food prices continue on upward trajectory
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THE festive season has always ushered in higher prices and unbelievable savings, therefore it is important that prices remain fair during this period, according to the Pietermaritzburg Economic Justice and Dignity Group (PMBEJD).
In November, the average cost of the Household Food Basket was R4 272.44. Compared to the previous month, the average cost of the Household Food Basket decreased by R45.11 (-1 percent), from R4 317.56 in October 2021 to R4 272.44 in November 2021.
Year-on-year, the average cost of the Household Food Basket increased by R254.19 (6.3 percent), from R4 018.25 in November last year to R4 272.44 in November this year. Since the start of the Household Affordability Index in September 2020, the average cost of the Household Food Basket increased by R416.10 (10.8 percent), from R3 856,34 in September last year to R4 272.44 in November this year.
Releasing the November 2021 Household Affordability Index this week, the group's programme co-ordinator, Mervyn Abrahams, said that according to their analysis food prices would continue their upward trajectory for the foreseeable future.
"The continuing run through of higher electricity prices in the long value chains, along with the cost of alternative supplies when electricity was not available, the steeper fuel price hikes and higher cost of transportation and the weakening rand, which substantially increases the costs of agriculture as a very high proportion of inputs are imported, all work to drive food prices upwards," Abrahams said.
The Brent Crude oil price, while weakening recently amid concerns of renewed global lockdowns, still presented an upside risk. With the Reserve Bank increasing the repo rate, this too would put pressure on debt servicing and would further drive prices upwards.
According to the PMBEJD, all household food baskets, except for Johannesburg, came down last month. Johannesburg had higher vegetable prices, cooking oil and bread in November.
The declines for all other baskets were off very high spikes in October, mostly driven by seasonal changes in vegetable prices, and the delayed run through of the electricity price increase.
The decline in prices in November was said to be inconsistent with past trends, albeit in most case the decreases were less than the spikes a month earlier.
“Food prices are extremely volatile at the moment,” Abrahams said.
Statistics South Africa’s latest Consumer Price Index for October 2021 showed that headline inflation was 5 percent, and for the lowest expenditure quintiles 1 to 3, it was 6.5 percent, 6 percent and 5.2 percent respectively.
CPI food inflation was 6.7 percent. The Producer Price Index for October showed that agricultural inflation was 8.7 percent.
The November 2021 Household Affordability Index tracks food price data from 44 supermarkets and 30 butcheries, in Johannesburg (Soweto, Alexandra, Tembisa and Hillbrow), Durban (KwaMashu, Umlazi, Isipingo, the Durban CBD and Mtubatuba), Cape Town (Khayelitsha, Gugulethu, Philippi, Langa, Delft and Dunoon), Pietermaritzburg and Springbok (in the Northern Cape).
The group said that, on the balance of it, women always told them that the festive season prices were a bit of a swindle except when one was fortunate, but most of the time people paid more.
Abrahams said that this Christmas was different from the previous ones as the country has been in various degrees of lockdown for almost two years.
Abrahams said Covid-19 was now primarily an economic problem that must be dealt with, with economic interventions.
"Welfare concessions can play a supportive role, but the primary intervention must be economic.
“It is the economic interventions that will most likely provide us with the best shot at getting out of the deep crisis we are in, and onto a more stable path,” he said.
BUSINESS REPORT ONLINE