Festive season food prices set to spike as petrol price rises and rand weakens

Lester Kiewit speaks to Julie Smith Researcher at The Pietermaritzburg Economic Justice and Dignity Group.

• October staple food basket spikes by R175

• The food price hikes are a result of Brent crude oil price increases and the expected weakening of the rand, says researcher

• Staple food basket in Cape Town in October now at R4,280 well above the national minimum wage

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Julie Smith from the Pietermaritzburg Economic Justice and Dignity Group speaks to Lester about research into the staples food basket in South Africa

Analysts globally are predicting a period of hyperinflation across the world, not just in South Africa, says Lester.

Smith agrees.

She says one issue is the Brent crude oil price is currently at $83 a barrel and is expected to rise to $94 a barrel.

Added to this is the expected weakening of the South African rand, she notes, from R14.90 and forecasted to go up to R15.75 against the dollar.

Thirdly South Africa is in the grip of its electricity crisis which makes the economy a great deal worse, says Smith.

So we are expecting that all of this will impact the cost of food on the supermarket shelves.

Julie Smith, Researcher - Pietermaritzburg Economic Justice and Dignity Group

Petrol prices are expected to hike further which will knock on and spike food prices further.

It is all to do with the brent crude price and the rand/dollar exchange with the former expected to increase and the latter expected to weaken.

Julie Smith, Researcher - Pietermaritzburg Economic Justice and Dignity Group

Smith says these increases will hit the poor hardest particularly in Cape Town where the price hikes have been relatively moderate throughout the Covid-19 period.

But in October the basket really spiked. It went up R175 month-on-month and is now sitting on year-on-year of R359 increase.

Julie Smith, Researcher - Pietermaritzburg Economic Justice and Dignity Group

The basket in Cape Town is R4,280 which is well above the national minimum wage.

Julie Smith, Researcher - Pietermaritzburg Economic Justice and Dignity Group

What is in a staple food basket to see families through the month? Smith says the basket contains products such maize meal, rice, cake meal, white sugar, sugar beans, samp, cooking oil, potatoes, onions, frozen chicken, salts and stocks, full cream milk, maas, eggs, and affordable meat cuts, fish and vegetables, and fruits.

Then also things for kids' sandwiches like peanut butter, margarine, apricot jam, in Cape Town polony is very important, and then bread which has also spiked quite a lot in Cape Town in the last month.

Julie Smith, Researcher - Pietermaritzburg Economic Justice and Dignity Group

What is the result of these price hikes?

Households are really cutting back significantly in terms of the quality of the food they are buying as well as the diversity. So, families will prioritise the core starches just to make sure that kids don't cry so much and at least there is starch and bellies are full - but they are not eating enough protein.

Julie Smith, Researcher - Pietermaritzburg Economic Justice and Dignity Group

Smith says this decrease in protein impacts growth and cognitive function and the drop in calcium products is a concern as they are critical for women and children.

More and more people are buying their vegetables on the streets which is a very good move in decentralising and making it more accessible.

Julie Smith, Researcher - Pietermaritzburg Economic Justice and Dignity Group

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