Brace for food price agony
Staples are set to soar by double digits as drought takes its toll, hitting the poorest of the poor hardest
Brace yourselves: if you thought food was expensive already, prices are expected to hike by double-digit percentages within the next few months. The prices of basic foods – such as maize meal and samp, vegetables, wheat, chicken and beef – are expected to increase the most, says AgriSA senior economist Thabi Nkosi.
The drought has affected overall food production in South Africa, but maize, vegetable and meat production have been the worst hit.
“White maize prices have already increased by 150%,” says Nkosi.
“This has impacted negatively on the price of maize meal and samp, which are the staple foods for most South Africans.
“The price of yellow maize has also already increased by 80% over the past year – and that has had an impact on the price of poultry.”
Nkosi says a similar trend is expected in the meat industry, where beef and chicken prices will rise by double-digit percentages towards the middle of the year.
“Due to the drought that affected most parts of South Africa, farmers had to increase the number of animals they slaughtered because it was becoming too expensive to feed the cattle,” she says.
“A knock-on effect of this was that the breeding stock was depleted, which means increased shortages will follow in the next few months.
“These will push up prices, making it difficult for an ordinary South African to afford meat.”
While the full effect of food price increases is expected to be felt around June, monthly research conducted by the Pietermaritzburg Agency for Community Social Action shows prices have been on the rise over the past three months, hitting an all-time high of 15% in baskets of basic foods.
The agency tracks the prices of 36 basic foods every month.
The latest barometer shows that a basic food basket increased by R149 since November – driven by hikes in the prices of beef, vegetables, cake flour, cooking oil, sugar beans, samp, rice, maas and eggs ( see graphic).
The agency’s advocacy and research officer, Julie Smith, says the findings – which are based on the basic food items found in the basket of the average South African consumer – suggest food prices may still increase by more than 15% in 2016.
The situation, she says, is not likely to get any better.
“We have seen the month-on-month increase in basic food items, and what is clear is that it will get worse with time.
“Sadly, it is the poorest of the poor who will be hardest hit because they will not be able to afford basic foods,” she says.
Nkosi agrees, adding that poor households are already spending at least 40% of their income on food.
“So if prices continue to soar like this, it means ordinary people will not be able to meet other needs, as all their money will go towards food,” she points out.
“This reality suggests massive ramifications for health and wellbeing, child development, productivity, education, health and economic outcomes, family functioning and social solidarity – and civil discontent and protest,” warns Nkosi.
“High food prices, together with Eskom’s request for a 16.6% increase in electricity tariffs, the exponential water-tariff increase, increased interest rates and excessive levels of indebtedness, may have disastrous implications for South African society,” adds Nkosi.