The Household Affordability Index for May by the Pietermaritzburg Economic Justice & Dignity group (PMBEJD) shows that food prices still remain high in the country – but meat prices are starting to turn.

For May 2023, the average cost of the Household Food Basket was R5,071.59 – up from 0.9% from April’s R5,023.95, which was the first time the basket ever went above R5,000.

However, year-on-year (YoY), the average cost of the basket increased by R461.70 (10.0%). This marks a drop from the 10.6% increase detected in April.

The May 2023 food basket’s increase was still ahead of the latest inflation numbers released by Stats SA, which said that annual consumer inflation in April reached 6.8%.

That being said, it was still far lower than the annual inflation of 13.9% for food and non-alcoholic beverages in April, which eased from a 14 year high of 14.0% in March.

However, regarding Stats SA’s data, there were still some increases in food prices when comparing March and April, with the bread & cereals price index increasing by 20.8% in the 12 months to April, up from March’s reading of 20.3%.

In addition, the milk, eggs & cheese product group saw an annual increase of 14.5% – the highest in 14 years (since January 2009).

Acccording to the PMBEJD, its basket comprises of 44 core food items that are frequently bought by lower-income households, who make up the majority of households in the country.

In the May basket, only six items showed a price drop between May 2022 and May 2023, with cooking oil seeing the largest drop of 16%.

37 other items in the basket saw a price jump, with beef seeing no YoY price change.

Meat prices are expected to come down in South Africa in the coming months, with the Bureau for Food and Agricultural Policy’s (BFAP’s) latest data also showing that pricing pressure on meat is starting to ease.

The BFAP noted that beef carcass prices have declined by around 8% since January and in May 2023 were more than 10% below May 2022 levels.

“Prices are expected to dip further in the next 3 months – mid-May to mid-July – due to seasonality, coupled with additional meat available in the market. This trend in lower prices will mainly impact cheaper cuts in the Northern parts of the country, where approximately 40% of consumption is situated,” it said.

However, Roelie van Reenen, supply chain executive at Beefmaster Group, warned that price pressure is likely to stick around for longer due to other factors at play.

“Increasingly, consumers have less money to spend. With financial budgets under pressure, they are making significant trade-offs in their shopping choices due to financial constraints. This is impacting the agricultural and beef value chains,” he said, adding that beef prices have declined, but the price reduction has not yet reached the consumer.

Van Reenen noted that producers are operating under extremely difficult circumstances, and the situation will likely remain challenging for the remainder of the year.

“It is a fact that we have to tighten our belts and brace ourselves for a prolonged period of challenging conditions,” he said. “I anticipate at least six to eight months of tough times ahead. However, we must remain optimistic and focus on producing cheaper, smarter, and more market-oriented products to protect our industry.”

The executive noted that herd sizes have decreased, and there has been a loss of export markets due to insufficient protection against diseases like FMD, leading to an oversupply of beef in the local market.

The energy crisis has further complicated the task of aligning production with consumer affordability and demand.

Eight items in the PMBEJD index saw yearly increases above 20%:

• Onions: +84%
• Green pepper: +37%
• Spinach+ +27%
• Maize meal: +26%
• Carrots: +24%
• Stock cubes: +22%
• Potatoes: +21%
• Tomatoes: +20%

On a MoM basis, the food baskets in Cape Town and Maritzburg decreases. However, in Joburg, Durban, Maritzburg, and Mtubatuba the basked increases MoM.

• The Joburg basket increased by R43.80 (0.9%) MoM, and increased by R 438.36 (9.5%) YoY, to R5,064.87
• The Durban basket increased by R159.92 (3.3%) MoM, and increased by R330.99 (7.0%) YoY, to R5,040.59
• The Cape Town basket decreased by R64.85 (-1.3%) MoM, and increased by R580.48 (14.9%) YoY, to R5,025.00
• The Springbok basket increased by R153.95 (2.9%) MoM, and increased by R564.10 (11.4%) YoY, to R5,491.46
• The Maritzburg basket decreased by R27.56 (-0.6%) MoM, and increased by R478.03 (10.7%) YoY, to R4,941.98
• The Mtubatuba basket increased by R93.92 (1.8%) MoM, and increased by R546.41 (11.6%) YoY, to R5,237.73

 

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