South Africans should brace themselves for a tough last two months of the year, with food prices set to rocket due to an increase in food production input costs, including fuel.
DURBAN – SOUTH Africans should brace themselves for a tough last two months of the year, with food prices set to rocket due to an increase in food production input costs, including fuel.
The grim warning, which was issued by the advocacy group Pietermaritzburg Economic Justice and Dignity (PMBEJD), comes in the wake of concerns that were also expressed by Agri SA last week about how the costs of fertiliser, herbicides, packaging, diesel, electricity and labour were making it nearly impossible for many farmers to produce food sustainably.
The AA said last week that recent exchange rate and commodities data showed that fuel price hikes would reach “catastrophic proportions” in November.
PMBEJD’s Julie Smith said the rise in electricity costs in June and July would see food prices rising well into next year.
The advocacy group conducts a “food basket” survey, where it tracks how much a household spends on a food basket in major cities.
Smith said in October 2021, the average Household Food Basket cost R4 317.56 adding that the rise in food prices in October was in line with predictions and is set to continue into 2022.
“The massive electricity tariff hike of ±14,59% effected in June and July, had to result in price hikes of goods and services down the line. These increases are now reflecting in higher food prices on supermarket shelves,” said Smith.
Rising food prices, she said, would likely continue into 2022, and put severe pressure on households whose incomes remain low through low baseline wages and low-level social grants.
Smith cautioned about the nutritional value of food bought as the food crisis increased.
“Our problem is not only that we are going hungry but what is on our plate when there is food. The higher cost of foods has emptied out the trolleys of any nutritional diversity,” she warned.
The advocacy group said some of the factors pushing up food prices included:
- Higher electricity tariffs, adding that the additional costs of sourcing back-up supplies amid loadshedding, load reduction and blackouts, will increase the cost of production, transport, and storage.
- The forthcoming fuel price increases in November, which will run through the value chains making agricultural production and transport more expensive.
- Escalating crude oil price, which will not only increase fuel prices but will increase the cost of many inputs into agriculture, processing, and packaging.
- South Africa’s crumbling railway system which sees most goods being transported by road, and therefore requiring fuel.
Smith pointed out that this month, all household food baskets increased in all major cities, including Cape Town, Pietermaritzburg, Johannesburg and Durban.
Agri SA executive director Christo van der Rheede appealed to all stakeholders, including the government, to engage and intervene in order to reduce the costs of critical inputs.
According to Agri SA, producing affordable, cheap and healthy food should be South Africa’s number one priority in order to avoid social upheaval if food becomes too expensive or there is a shortage of food.
Van der Rheede said it was critical that input costs be kept under control and this called for collaboration.