Activists march to Parliament carrying empty pots and placards to protest against high food prices and for recognition of the constitutional right to food. Picture: Henk Kruger Independent Newspapers
EXPERTS are baffled at how families are forced to fork out more for basic commodities, even though the factors that caused the cost of food production and supply to spike in recent years were subdued for much of 2024.
Their concern was that the higher prices not only worsened the food security for the indigent but also grabbed more from the plates of many South African households.
In their monthly Household Affordability Index report released on Wednesday, the Pietermaritzburg Economic Justice and Dignity (PMBEJD) group said the average cost of a household’s basket increased by R93.
The PMBEJD tracks the prices of 44 basic foods, using stores around the country as a sample group, with a current average total cost of R5 348.65.
The PMBEJD said this was despite load shedding having been halted for more than 200 days, the petrol price dipping five successive times since June and the rand consistently trading favourably at about the R17-mark against the dollar.
Stats SA said this month that the inflation rate had dropped for the fourth consecutive month to 3.8%.
Economists have been salivating over the possibility of a bigger interest rate cut to be announced by the SA Reserve Bank next month.
“We’ve been asking ‘is there going to be any relief for consumers?’,” said is the question we’ve been asking,” said PMBEJD programme co-ordinator Mervyn Abrahams.
He said between May and August this year, there had been a slight decrease in the overall cost of the basket, but that rose in September and into this month.
“This upward trend is taking place as we see petrol and diesel prices decline, stability of electricity supply, interest rates and CPI headline inflation trending downwards. In such a context we would expect that food prices should have continued on its lower trajectory.”
Abrahams said they also noticed that previous crises like bird flu (eggs and chicken), the war in the Ukraine (sunflower oil), embargoes on rice and other challenges, once resolved, did not result in food prices stabilising at levels reasonably close enough to pre-crisis prices.
He said they found that core foods that ensured families did not go hungry while also being the primary basis for meals (maize meal, rice, potatoes and bread), items like oil, sugar, salt and stock remained expensive.
“We don’t know what is happening. Food producers and retailers must explain why the prices of certain foods continue to increase, what margins they are working with and what pressures they encounter.
“This is necessary to assure consumers that the price they pay reflects the true costs of food,” he said.
The Independent on Saturday asked three major supermarket chains (Spar, Pick n Pay and Shoprite) these questions earlier this week but in spite of repeated requests, only one had replied by late yesterday.
Spar national communications manager Mpudi Maubane said the nature of the industry meant they regularly grappled with external factors including supply chain challenges and inflationary pressures that continued to affect food pricing.
“However, the group constantly negotiates for the best possible prices from suppliers and middle-men to provide value to our customers,” she said.
Abrahams said the Competition Commission this month released its Essential Food Pricing Monitoring (EFPM) Report which raised similar concerns about food pricing.
The Commission’s principal economist, Khalirendwe Ranenyeni, yesterday said the Commission’s main objective was to promote transparency regarding the margins earned by producers and retailers of products and the care committed to monitor margins of selected food items.
“Of great concern in the latest edition of the EFPM Report is the finding that easing cost pressures have been slow to translate into lower food prices
“We currently are not investigating any major food producers and retailers for any anti-competitive behaviour but are looking into understanding whether the observed prices are as a result of any anti-competitive conduct.”
The EFPM report noted several positive signs of easing food-cost pressures throughout the economy.
“Those factors were 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 report stated.
Abrahams encouraged the Commission to “keep a keen eye on the sector and use instruments available to them to pull costs down”.
He suggested that more food items needed to be zero-rated for VAT to provide relief to consumers.
“President Cyril Ramaphosa spoke about it at the opening of Parliament earlier this year but nothing has happened since.
“We want items like frozen chicken portions and offal, beef, fish, stock, curry powder, tea, margarine, peanut butter and polony zero-rated.”
He said considering the minimum wage earnings was about R4 500 and the PMBEJD’s food basket of nutritious items for a family of four cost R5 200, affordability was driving food insecurity.
Marc Wegerif, a senior lecturer and development studies programme co-ordinator at the University of Pretoria, emphasised during a radio interview the importance of prices in relation to food insecurity.
Wegerif referred to some dire finds made in a recent report published by the Human Sciences Research Council.
“Overall, SA is faced with a worrying food insecurity situation. The Household Food Insecurity Access Score (HFIAS) indicates that more than half of the country’s households (63.5%) experienced food insecurity.
“It also showed that 17.5% of households were severely food insecure, 26.7% were moderately insecure, while 19.3% were mildly insecure,” the report said.
“This is something we should never be tolerating in our country,” said Wegerif.
He said people were spending a higher proportion of their income on food so food inflation became more important to them.
“When food inflation was above the core inflation mark and wages and social grants did not keep up with food prices, then consumers became unable to buy as much food as they did previously.”