Latest food price increases raise worry for the poor
As the food price spirals a government agency has raised concern about nutrition and food security for the country's poor.
SA consumers are forking out almost ten percent more for a basic basket of food items, compared to a year ago, raising concerns about the latest food price hikes and food security in the country.
This was according to the National Agricultural Marketing Council’s latest Food Price Monitor February 2021 which was released recently.
During January 2021, the Consumer Price Index (CPI) released by Statistics South Africa (Stats SA) indicated that headline CPI and the food and non-alcoholic beverage price indices had reached 3.2% and 5.4%, respectively. The same indices were 3.1% and 6.0% during December 2020, indicating rapidly rising prices.
According to the NAMC report the cost of a basic urban food basket was R971.98 in January, up 9.8% compared to January 2020 (year-on-year increase). The monthly cost of the basket rose by a 1,3% compared to December 2020.
High price inflation of 6% or more was observed for the following products within the NAMC food basket: Rice, dried beans, polony, eggs, beef offal, white bread, super maize meal, IQF chicken portions, chicken giblets, brown bread, bananas, instant coffee, sunflower oil, peanut butter, beef mince and cheddar cheese.
Here is a list of international and local staple food prices that increased the most:
- The international price of wheat increased by 29.8%, while domestic wheat prices increased by 12.9%.
- Urban consumers paid 15.7% and 13.6% more for a loaf of white and brown bread (700g), respectively.
- Domestic yellow maize prices increased by 26.7%, while international yellow maize prices increased by 36.5%.
- Special and super maize meal prices (2.5kg) increased by 20.9% and 9.8%, respectively in urban areas.
- The urban prices of sunflower oil (750ml) increased by 10.5%.
- Domestic prices of sunflower seed increased by 62.4% annually, while international sunflower seed prices increased by 51.3%.
“The items with high inflation could have negative implication in terms of basic food security as well as dietary diversity (due to the inflation on meat and fruit). When comparing the inflation rates for January 2021 to January 2020, with October 2019 to October 2020 the rate of inflation was higher for bread and cereals, eggs, bean products and animal protein foods,” the NAMC said.
Traditionally, the food price declines in the month of January after the festive season and then rise again before Easter approaches.
However, this January most food prices increased, with food groups including fruit, meat and oils and fats reflecting the strongest growth.
Food price hikes on basics:
- meat (7.2%)
- processed foods (6.1%)
- milk, eggs & cheese (6.0%)
- fruit (6.0%)
- unprocessed foods (5.2%)
- bread & cereals (5.1%)
- fish (4.0%)
- sugary foods (7.3%)
- *oils & fats (10.5%)
“A key factor driving food inflation is the exchange rate, which remains a key uncertainty in the coming months. The volatility evident in the exchange rate in recent months reflects the influence of global sentiment towards risk and emerging markets, as well as fundamental risk factors domestically,” the NAMC said.