Inflation is at a 30-month high of 5.2%, but the increase in the cost of household staples such as chicken, maize, beans and cooking oil is leaving it in the shade.
The latest consumer price index analysis by Stats SA shows the cost of cooking oil leapt by 30% in the past year, while dried beans are 27% more expensive and whole chickens have gone up by 17%.
“If you look at the last few inflation numbers that have come out, the basic [shopping] basket – which includes maize, chicken and oil – has become very expensive,” said Agri SA chief economist Kulani Siweya.
“This is a direct consequence of the rising prices of international soft commodities due to supply constraints across the globe.”
Droughts in the US and Brazil have reduced the supply of corn, sunflower seeds and soy beans, and China’s growing appetite for these commodities is being fed in part by SA’s record harvests.
The UN Food and Agriculture Organisation said global food price rises in May were the highest in a decade, driven by a surge in the international prices of vegetable oils, sugar and cereals.
The FAO food price index is 39.7% higher than a year ago, and maize – which is 90% pricier – is leading the charge.
Bheki Mahlobo, an analyst and economic researcher at the Centre For Risk Analysis, said rising food prices were just the latest hardship for low-income and middle-income households, where wage and grant increases have lagged inflation for several years.
Nomvula Siphangomusa, a director at Siphila Ngomusa Community Development in Durban, said she was unable to feed the 300-plus homeless people the organisation shelters across the three sites last Wednesday.
“There was just no money left in the kitty to buy food, and our sponsorship pipeline has run dry. On Thursday, we were only able to provide some polony and bread for breakfast,” she added.
Avril Thomas, who runs 23 feeding schemes in Cape Town for the Living Hope Trust, said their menus relied increasingly on beans because chicken as a protein source had become unaffordable. “We try to add some white meat every second week or so,” she said.
But prospects are not looking good for the price of what is supposedly SA’s cheapest protein. Izaak Breytenbach, general manager of the SA Poultry Association, said the rising maize price was making chicken feed more expensive as the industry is reeling from an annual 12.5% fall in sales.
Poultry consumer group ChickenFacts said the average retail price of drumsticks and leg quarters went up by between 5% and 7% in the first half of the year. The organisation monitors special offers at major retailers.
And poultry import tariffs may rise again after an increase last year sparked by an International Trade Administration Commission investigation into dumping by Ireland, Spain, Poland, Denmark and Brazil.
In an effort to protect their margins, large producers had applied for more tariff protection on certain chicken imports.
The SA National Consumer Union said the price of individual quick frozen (IQF) chicken portions – the product preferred by low-income households – rose by 9% in the year to March after the new tariffs were introduced.
“This means that minimum wage earners will struggle to afford what should be an affordable source of protein,” they said.
Unati Speirs, who leads Emerging Black Importers and Exporters SA, said: “Price increases are making chicken completely unaffordable to the 40% of SA consumers that are already regarded as poor.”
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