The food price cost squeeze is approaching

The Department of Agriculture, Land Reform and Rural Development (agriculture department) recently announced that despite the Russia-Ukraine conflict, there was no need for South Africans to stockpile food, as the country has enough food to meet demand.

The conflict has seen sanctions imposed on Russia and disruptions to ports in the Black Sea region, causing commodity prices to skyrocket due to supply concerns and an increase in shipping and freight costs. And while the agriculture department’s statement may offer us some comfort, food availability is not the same as food affordability.

Around 12,5 million people in South Africa are unemployed. According to the expanded definition of the term ‘unemployed’, this means that about 47% of the working population is out of work. Statistics South Africa reported at the end of March that consumer price inflation remained unchanged at 5,7% from January to February. However, this figure may be skewed, as the impact of rising fuel and commodity prices is likely to only become evident in the next three to four months.

The Pietermaritzburg Economic Justice and Dignity group’s (PMBEJD) Household Affordability Index, published at the end of February, shows that the price of a food basket for a household of four people increased 8,9% year-on-year (y/y), with a family in Johannesburg requiring R4 410,59/month, a household in Durban requiring R4 428,56/month, and one in Cape Town needing R4 203,15/month. The cost of an average food basket across all surveyed areas for a household of four people was R4 355,70/month. Based on the national minimum wage for 2022, a general worker will earn around R3 470,40/month for a 20-hour working week. While a household of two working people would thus earn more than it takes to feed a family of four people, this doesn’t take into consideration other expenses, such as transport or childcare. Moreover, according to the index, on average, one wage has to support a family of at least four people.

As a result, core foodstuffs remain out of reach for many working people, and even more so for the unemployed who rely on government grants. While the staple maize meal, for example, has seen a marginal y/y increase from R241,06/30kg bag to R241,61/30kg bag, other commodities, such as cake flour (2021: R94,72/10kg bag; 2022: R95,47/10kg bag) and white sugar (2021: R159,74/10kg bag; 2022: R165,26/10kg bag), have seen larger increases. Cooking oil has seen an almost 35% y/y increase from R108,53/5ℓ bottle in 2021 to R146,29/5ℓ bottle in 2022.

The PMBEJD index further states that a core food basket, which includes the items a household is most likely to purchase first to ensure that its members don’t go hungry, would cost R2 303,78/month in 2022, up from R2 180,64/month in 2021. This basket excludes foods that are important in terms of nutritional value, and only focus on those that satiate hunger.

The rising cost of food should be of concern to everyone, not only from a socio-economic perspective, but also from one of social cohesion. As these costs will have a much greater impact on the poor and vulnerable, closing the inequality gap in South Africa will become increasingly difficult, to the detriment of these people in particular, and society as a whole.

Janine Ryan, Editor