South African Food Prices Soar Over 25% Amid Multiple Crises

South African food prices for key grocery items have risen by over 25% on average since the start of the Russia-Ukraine conflict in 2022, according to the Household Affordability Index by Pietermaritzburg Economic Justice & Dignity (PMBEJD). The price increase has been exacerbated by a poor local maize crop, a weak rand, and high fuel prices, despite the easing of the overall food inflation, figure in recent months.

The average cost of a household food basket has increased by 8.3% annually, reaching 5,324 rand and 86 cents. Prices of staple foods like rice, sugar, potatoes, and tomatoes have seen significant spikes, ranging from 5% to 14%. However, wages have not kept pace with this rapid inflation, leaving working-class households struggling to afford basic necessities.

Why this matters: The soaring food prices disproportionately impact the most economically vulnerable consumers in South Africa. The combination of global conflicts, domestic agricultural challenges, and economic factors has created a perfect storm that threatens food security and the livelihoods of many South Africans.

The categories with the highest annual price changes in March were miscellaneous goods & services (up 8.5%), education (up 6.3%), health (up 6.0%) and housing & utilities (up 5.9%). Education fees saw the highest increase, with high schools recording a 7.3% rise. Food inflation, however, slowed to 5.1% in March from 6.1% in February, the lowest annual increase take, since September 2020.

South Africa has faced persistent dryness and a heatwave in key summer crop-growing regions, leading to concerns over potential spikes in consumer food inflation. Food price inflation in South Africa averaged 11% in 2023, a notable increase from previous years. Drivers behind the recent uptick in food inflation include international factors like the Russia-Ukraine conflict and global supply chain disruptions, as well as domestic issues such as animal diseases, currency depreciation, and electricity supply challenges.

Despite these challenges, South Africa's agricultural sector has demonstrated remarkable resilience, achieving a record-breaking $10.2 billion in agricultural exports in 2023, led by products like citrus, maize, and wine. Recent developments suggest a potential alleviation of some inflationary pressures, with global grain supplies becoming much more abundant and improved preparedness among farmers regarding power supply disruptions. While certain sectors like white maize products may still face inflationary pressures, other segments of the food basket could experience moderation or sideways movement in prices.

Key Takeaways

• South African food prices rose over 25% since Russia-Ukraine conflict, due to poor crops, weak rand, high fuel.
• Average household food basket cost increased 8.3% annually, reaching 5,324 rand, while wages did not keep up.
• Food inflation slowed to 5.1% in March, the lowest since Sept 2020, but still impacting vulnerable consumers.
• Persistent dryness and heatwaves led to concerns over potential spikes in consumer food inflation, averaging 11% in 2023.
• Despite challenges, SA's agricultural sector achieved record $10.2B exports in 2023, with potential easing of some inflation.