Food price to peak ahead of the Christmas break

By Drum Digital
17 October 2013

South African consumers are feeling the pinch as food prices continue to increase year-on-year.

The cost of basic foods has risen by 8.7% in one year, according to a study by the Pietermaritzburg Agency for Community Social Action (Pacsa).

The 2013 Food Prices Barometer, focused on the cost of 32 basic food products bought by poor and working class households in Pietermaritzburg, Pacsa said in a statement.

The combined price of the foods increased to R1 509.34 in September, a higher year-on-year increase than the Consumer Price Index (CPI) of 6.4%.

The increase was also higher than the CPI-Food of 7.1%, indicating that poorer households were carrying a greater inflation burden.

"High food prices are influencing what people buy and eat, and how they prepare their meals," Pacsa said.

"As prices of basic food increase, households are buying less and cheaper food."

The most significant year-on-year price inflations were for potatoes at 51.4%, cheese at 35.6%, and canned fish at 20.7%.

"The price spike peaks over the Christmas period may be driving higher levels of food price inflation throughout the year."

However, when prices reduced after such a spike, they tended to stabilise at a higher price.

"Significant fluctuations on the majority of foods from one month to another makes it extremely difficult to budget for food," Pacsa said.

The study's recommendations included that the national government should increase the CPI-Food component of the CPI to better reflect the high proportional food expenditures of poor households.

Job creation and linking annual wage and social grant increases to CPI-Food were also recommended

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