The Bureau of Food and Agricultural Policy (BFAP) has released its Food Inflation Report, which highlights the foods that have seen the biggest price increases in South Africa.
This includes the Thrifty Healthy Food Basket (THFB), which measures the cost of basic healthy food for low-income households in South Africa. The basket consists of 26 nutritionally balanced food combinations.
The THFB in August hit R3,270 per month, up 0.3% from the July basket and up 11% from the 2021 basket.
According to BFAP, the share of food spending as a percentage of total income spent on food rose to 31.2% from 31.1% in July. This is based on twice his minimum wage earnings.
South Africa’s food price inflation remains lower than in other countries such as Kenya, the EU, Brazil, Zambia and the US, but higher than in China, the agency said.
A series of supply-side disruptions, including droughts, heatwaves, the Russian-Ukrainian war, and rising transportation costs, have fueled widespread inflation around the world. “In South Africa, this is exaggerated by the depreciation of the exchange rate, which is why South Africa’s food inflation is catching up with food inflation in the developed world,” the group said.
Meat and poultry prices are rising
Worryingly, the high cost of feed grains as a result of the ongoing conflict is beginning to be reflected in higher prices for meat and poultry. South Africa’s red meat prices are already under pressure due to low slaughter numbers, the agency said.
“Especially for cattle, persistently high feed prices, increased risk of disease and economic constraints faced by consumers are reducing the throughput of the red meat value chain,” the report said. This has impacted chicken prices, which have risen significantly over the past year, as consumers avoid red meat.
“Like beef, high feed costs are causing cost pressures, but soaring global poultry prices are partly the result. We expect these factors to continue to play a role towards the end of the year, so prices are likely to remain high.”
However, with limited room for consumers to absorb further price increases, South Africa’s meat price gains are likely to falter and meat inflation will slow towards the end of the year.
“Locally, the exchange rate depreciation has created turmoil, with concerns about a global economic slowdown, increased load shedding and a deepening global interest rate cycle weighing on the value of the rand.”
Source: Business Tech