How food prices have changed in South Africa over the past 5 years

Statistics South Africa released the latest inflation data for August 2021 this week, showing that food price inflation continues to be one of the main contributors to the country’s CPI.

The food and non-alcoholic beverages product group made the second largest contribution to the annual inflation rate in August, with a plus of 6.9%. This is the highest food inflation since June 2017, when it was also 6.9%.

However, there are signs that food inflation may have slowed, Stats SA said.

The monthly increase in August 2021 was 0.2% – identical to the values ​​for July and June. In comparison, the average monthly growth over the past 12 months was 0.6%. Of the 11 food categories, four monthly decreases were registered in August; one showed no change and six recorded increases.

The prices for bread and cereal products fell by 0.5% from July 2021. The prices for corn flour fell by 1.2% and for white bread by 1.1%. The annual growth for this category was 3.5%.

Meat inflation continues to accelerate, reaching 10.7% in August. This is the highest level since February 2018, when the rate was 11.4%. IQF chicken products (individual quick frozen) were 1.6% more expensive in August than in July, while ground beef was 0.4% cheaper.

The annual inflation rate for oils and fats was 21.3% in August, down from 22.4% in July. Edible oil prices fell 0.4% and margarine 0.8% month-on-month.

Rising food prices

Research by the Pietermaritzburg Equity, Justice and Dignity Group (PMBEJD) found that food price inflation for poorer households in South Africa rose by 10% over the past year – well above the headline CPI of around 5%.

BusinessTech has been pursuing a “middle class” grocery basket since 2015, which includes some foods that would be more common in a middle-income basket.

These include apples, vegetables, milk, flour, tea, sugar, rice and cola. The shopping cart itself is not a comprehensive look at the mid-range grocery items, but it tracks price fluctuations in the segment and across different retail brands.

In comparison to comparable brands and foodstuffs, South African retailers have succeeded year after year in keeping the price increases within limits for the most part, and even reducing some things between 2020 and 2021.

Since 2015, this shopping cart has increased by almost 50% over the years, with the same items increasing from an average of R 226.33 in 2015 to R 335.01 in 2021 (+ 48%).

Looking at a five-year view (2017-2021), the increase of 22% is rather subdued.

Prices reflect the average cost of private label in four retail chains in South Africa, recorded in-store and online for the specified year.

The price inflation in the BusinessTech basket is closely aligned with the food price inflation recorded by Statistics South Africa between 2017 and 2021. Nevertheless, it is below the growth in average salary and net income over the same period.

Between 2017 and 2021, the average salary rose from R 19,170 to R 23,122, an increase of 21%, according to Stats SA’s quarterly employment survey. Meanwhile, the BankservAfrica Take Home Pay Index shows a rise in nominal take home pay of just 14% from R12,808 in 2017 to R14,620 in 2021.

While the country’s average formal salary has barely kept pace with rising food prices over the past five years, the reality – disposable income after tax – is lagging well behind.

According to Stats SA, headline inflation has increased by 22.3% over the past five years based on December 2016. Food inflation is 23.6% compared to the end of 2016.

Among the food categories examined by Stats SA, meat products have seen the most significant price jump since 2016.

  • Meat: + 35.3%
  • Oils and fats: 31.8%
  • Fish: + 28.0%
  • Cold drinks: + 25.2%
  • Unprocessed foods: + 24.0%
  • Sugar, sweets and desserts: + 23.9%
  • Processed foods: + 23.0%
  • Milk, cheese and eggs: + 21.7%
  • Hot drinks: + 19.8%
  • Vegetables: + 19.2%
  • Other food: + 16.9%
  • Bread and Grain: + 9.7%
  • Fruit: + 1.1%

Read: Gasoline hit a record high in South Africa this month – here are five more things that will be more expensive now in 2021

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