Food inflation could fall next year, meanwhile people pay lots more

2016-06-30 10:42

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Pietermaritzburg - Low-income families need to earn at least 50% more than they do now to be able to afford a monthly basket of food that is nutritionally sufficient.

This is according to the latest monthly Food Price Barometer compiled by the Pietermaritzburg Agency For Community Social Action (Pacsa).

The survey showed an average basket of food for a low-income family had increased by 13,3%, or R222,12, over a year, to R1 892,31 in May.

A big component of the increase was the price of maize meal, the staple food of low-income families.

The price of a 25 kg bag of maize meal has increased by 32,8% over a year to the end of May, with the bag costing R55,83 more than it did 12 months ago.

Pacsa said other foods that drove up the basket price included sugar beans and chicken pieces. Vegetable prices remained volatile, and were lower in May compared with the same month a year earlier.

Food prices have risen sharply this year, with many economists predicting worse to come, due to the effects of the drought and a weaker rand exchange rate.

Standard Bank said recently that the lowest-income group (earning R0-R19 000 per year) is expected to suffer the highest rate of inflation this year of 8,6% year-on-year.

Food comprises a large part of that inflation — these people spend 33,5% of their budget on food.

FNB’s provincial head of agriculture, Marc Strydom, said this week that the price of beef was expected to rise near year-end, as farmers held back more of their cattle from the abbatoirs to rebuild their herds after the drought.

Pacsa said the cost of a minimally nutritious food basket for a family of four was R2 464,36 in May 2016, for a family of five it was R3 115,26 and for a family of 7 it was R4 313,70.

“According to our forecasts, there will be some inflation relief in 2017, as food inflation should fall sharply,” Standard Bank noted.

Read more on:    pietermaritzburg  |  food  |  inflation

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