Edward West, The Witness
The prices of many vegetables have increased sharply in the three months to January 2016, while the price of maize meal, the staple food of most South Africans, was 21,5% higher per 25?kg bag in January 2016 when compared with the same month a year before, according to the Pacsa Monthly Food Price Barometer.
Pietermaritzburg – The price of food in the baskets of low-income households shot up by nine percent in the three months to January — and there are more price hikes to come.
The percentage is an average — big increases were recorded for some foods, such as a 109,5% increase on a 10 kg pocket of potatoes, a 65,4% increase for a 10 kg pocket of onions and a 78,8% increase for two heads of cabbage.
Economists and agriculture organisations have warned for some months now that the price of food would rise substantially due to the severe drought. Food inflation, until November last year, had been low.
“Extreme levels of food price inflation call on government to intervene immediately and decisively where they are able to,” the Pietermaritzburg Agency for Community Social Action (Pacsa) said in its survey of monthly food inflation for low-income households that was released yesterday.
The month-on-month increases in the December and January food price data were eight times higher than the average monthly increases over the preceding 12-month period, Pacsa said.
The month-on-month increase for November to December was 4,01% and for December to January it was 4,8% up.
Meanwhile, the average month-on-month increases in the survey for December 2014 to November 2015 was only 0,52%.
However, the year-on-year increase from January 2015 to January 2016 was 14,6%.
Pacsa said the price hikes suggest that food prices might increase beyond 15% in 2016.
The government needed to find ways to put more money into the pockets of low-income earners in the short term, while social grant increases, due in February, needed to rise in line with projected food price inflation for 2016, Pacsa said.
Longer term, the national minimum living wage debate needed to be fast-tracked, while Nersa needed to turn down Eskom’s latest proposal for a 16,6% increase in electricity tariffs. Municipalities needed to work harder on subsidy schemes to make services affordable at lower consumption volumes.
Low-income households, which bore the brunt of the employment crisis and low wages, were already under severe strain.
“Households, over the years, have absorbed [price hikes] through cutting back expenditure. This strategy is now reaching critical point, where many households are unable to cut back any further without seriously damaging themselves.
“We need to seriously explore a new economic paradigm that can afford each person a life of dignity,” Pacsa said.
Neil Roets, CEO of debt management firm Debt Rescue said the short- to medium-term outlook for consumers “looks increasingly gloomy” due to food price increases and the depreciation of the rand.
“There is little the government can do to mitigate the prices of food, especially the cost of maize meal which is expected to increase by 50%,” Roets said.
“Subsidies are never a good idea and in South Africa at the moment there is no excess cash to even consider subsidies. Feeding schemes may be an efficient way to prevent widespread hunger, but it will require massive organisational structures.”
The weak rand meant that staples like maize and wheat, which are in short supply due to drought, will need to be imported at almost twice the local prices, he added.