Food inflation crushes poor

2016-12-29 12:42
Sunjeev Badhur, who has been selling mielies on Boshoff Street for the past three years, said that he had just brought his price down from R30 for five to R20 for four mielies, because the farmers are selling at a cheaper price and business is now going well.

Sunjeev Badhur, who has been selling mielies on Boshoff Street for the past three years, said that he had just brought his price down from R30 for five to R20 for four mielies, because the farmers are selling at a cheaper price and business is now going well. (Ian Carbutt)

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Low-income families paid more than three times the inflation rate increase for food this month compared with the same month last year.

And 2016 will go down as a year where most low-income families became poorer.

The prices of a basket of “big foods”, which low-income households regard as essential for basic nutrition, such as cake flour, white sugar, maize meal and cooking oil, increased by 21% year-on-year to R612,79, in December.

This is according to data from the December 2016 Pacsa Monthly Food Price Barometer, which showed also that the average prices of a wider variety of basic foods increased 15,5% in December compared with the same month a year before.

With inflation at 6,6% in November, and unlikely to have changed much in December, The Witness calculates that low-income families paid more than three times the inflation rate increase for “big foods” in December when compared with last year.

Pietermaritzburg Agency Community Social Action’s director Mervyn Abrahams said on wednesday their data showed that poor people paid way above the inflation rate for their basic foods, throughout 2016.

“This means even if these families managed to get an inflation-related wage increase this year, they were still getting poorer.

“All the research, not only our own, shows that food constitutes 75% of the monthly expenses for these families,” he said.

“Looking forward, we don’t expect these prices to fall … food inflation needs to fall,” said Abrahams.

The prices of the “big foods”, as measured by Pacsa, were for 25 kg maize meal, 10 kg rice, 10 kg cake flour, 10 kg white sugar and four litres of cooking oil.

High increases in the prices of the “big foods” means that low-income households cut back on foods that are important for balanced nutrition, such as meat, fish and eggs, dairy and vegetables.

This results in compromised nutrition; which impacts more on women because women eat last and make sure nutritionally-rich foods, when they are short, are prioritised for children and men in the house.

The key drivers of food price inflation on the December 2016 basket were maize meal (a 25 kg bag increased by R6,01 to R233,49); sugar beans (a 5 kg bag increased by R11,99 to R116,65); frozen chicken pieces (6 kg increased by R20 to R175,47); and beef (stewing beef or chuck increased by R9,01 per kilogram to R62,49.)

The average food basket price increased by R266 from R1 714,18 in December 2015 to R1 980,18 in December 2016.

Compared with November, the December food basket increased by 2,1% to R1 980,18.

In December 2016, the difference in cost between the Pacsa food basket (not nutritionally complete) and the Pacsa minimum nutritional food basket was R2 406,19, at R4 386.37, this month.

It means low-income families with seven members are underspending on nutritious, albeit still very basic food by 54,9%.

For black South African households, the December 2016 Pacsa Minimum Nutritional Food Basket for a family of four persons would take up 71,7% of the proposed R3 500 national minimum wage, leaving little other money for other expenses.

“The low proposed national minimum wage will trap working families in ever deeper cycles of poverty,” Pacsa said.

One of the biggest drivers of food prices has been the drought, which, according to Absa economist Ernst Janovsky, writing in an agriculture outlook for 2017, resulted in an approximate drop in agriculture volumes of about 30%, while prices compensated and increased by about 60%. “Rainfall predictions for the coming season have improved substantially and early indications are that the drought will soon be something of the past,” he said.

Agri SA senior economist Hamlet Hlomendlini said: “If the weather conditions become favourable as predicted by the weather service, there will be significant improvement in production in the current season going into 2017 … consumer price inflation which was standing at 6,6% in November 2016 should start moderating in the second or third quarter of 2017.

“This will greatly benefit consumers as it will lead to a downward movement in food prices.”

Read more on:    pietermaritzburg  |  food prices

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