Yet more South Africans will have been plunged into food insecurity after food prices spiked 14% in March. The jump in the cost of food — contributing more than a third to the annual increase in the inflation measure for the month — yanked the annual consumer price index upwards by 7.1%.
With a 20.5% price increase year on year, vegetables topped the list, followed by grains (20.3%), processed food (16.2%) and oils and fats (16%), according to Stats SA figures.
The rapid rise in domestic food prices comes against a drop in food prices internationally, as measured by the global food price index of the UN’s Food & Agriculture Organisation (FAO).
In comparison with South Africa’s 14% increase, the international cost of food in March was down almost 21%. The global gauge was down 2.1% on the previous month on the back of “drops in the cereal, vegetable oil and dairy price indices”, the FAO said earlier this month.
South Africa’s rising food prices are attributed in large part to load-shedding as well as the heavy rainfall last year, which affected vegetable production in particular, says Agri SA CEO Christo van der Rheede.
Then there are the rising input costs. South Africa imports most of its fertiliser, primarily from China and Russia. But while the international fertiliser price has moderated, the rand’s slide against the dollar — from R15.60/$ a year ago to its present low of R18.18/$ — means the country has seen little benefit from that price decline.
As Van der Rheede tells the FM, “the exchange rate is keeping [fertiliser prices] artificially high”.
Meanwhile, load-shedding is wreaking havoc on farmers, who require electricity to irrigate their crops. As stage 6 power cuts leave the country in the dark, they have just 14 hours a day to irrigate their crops, sometimes in the dead of night.
The impact of load-shedding on food producers and retailers is stark. For instance, consider the feedlots, which supply urban centres with meat. They are “bursting at the seams”, says Van der Rheede, “because the stock isn’t sold”.
“Retailers aren’t buying [at the same pace] as usual because they don’t want to risk wastage when the power goes off.”
They’re also cutting back on stock, as unforeseen expenses for necessities such as generators and diesel begin to bite.
It doesn’t looks as if the situation is about to change soon either. As Theo Boshoff, CEO of industry organisation Agbiz, tells the FM: “Agribusinesses are operating under increasingly difficult circumstances. Declining service delivery and infrastructure, unreliable energy supply and increased crime and instability do not bode well for investment.
“The private sector has reached out to the government and offered to assist where it can. Agribusinesses are willing and able to invest in energy generation and rail and port operations, but we need willing partners.”
All this, of course, has a knock-on effect on consumers, who can now buy 14% less food for the same price they paid last March.
The healthy food basket to feed a family of four jumped to R3,504 in February — up R387 or 12.4% from a year earlier
It’s the country’s poorer households who feel this most acutely, as is clear from the Bureau for Food & Agricultural Policy’s thrifty healthy food basket. A measure of how much it costs to feed a family of four a basic nutritious diet for a month, the basket jumped to R3,504 in February (the most recent figure) — up R387 or 12.4% from a year earlier.
The basket accounted for 33.4% of the income of a household of two adults working for the minimum wage, plus two children receiving child support grants (a combined R10,491 a month). The previous month, the basket equalled 32.6% of that income.
The combined income of R1,660 a month for a household of two unemployed adults receiving the R350 a month social relief of distress grant, with both children on a child support grant, amounts to just half the value of the healthy food basket.
Still, if the rand were to strengthen and rolling blackouts miraculously ease up, South Africans may yet benefit from the global decline in food prices, particularly for maize and wheat (the primary sources of carbohydrates in South Africa). Until then, however, the country — and the poor in particular — will continue to feel the pinch.
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