Food prices bite into your budget
2 November 2008, 14:27
The spiralling cost of food is having a dire effect on local households, more than half of which earn less than R2 000 a month. Out of this, more than R600 is spent on food and non-alcoholic drinks, according to the South African Food Cost Review.
The report for 2007 by the National Agricultural Marketing Council, a statutory body under the department of agriculture, found that, on average, wheat product prices increased by 16,32 percent, maize by 20,67 percent, sunflower products by 19,37 percent, rice by 8,65 percent and dairy product prices by 26,81 percent.
The recent high cost of fuel - expected to drop by 45c a litre this week - coupled with accelerating food prices have pushed up inflation.
Basic household items, such as tea and coffee, went up by 12,72 percent, white sugar by 12,55 percent, peanut butter by 9,56 percent, pilchards rose 13,31 percent, and beans by 19,81 percent.
The report, released this week, said prices are closely linked to international commodity price movements and the exchange rate and that the poor were facing the brunt of food price increases.
Nkgasha Tema, a senior researcher with the council, said that, on average, housing, water, electricity, gas and other fuels, transport, food and non-alcoholic beverages made up the largest proportion of consumer spending.
He said net food importing countries would be hardest hit, and this was of particular concern for almost all countries in Africa. Nutrition of the poor is also at risk.
Tema said that, according to the Living Standards Measure (LSM) 1, the poorest group of households spent about 11 percent of income on poultry products. Next came bread, rice and mealie meal.
Middle-class households spent relatively high amounts on white bread, beef, mutton, lamb, poultry and fresh milk. While people in LSM 10 (most affluent) spent 28 percent of their food expenditure on meat products, followed by prepared food at 17 percent. "Certain staple foods, like chicken and rice, have the same penetration across all lifestyle levels."
The review found that fuel costs had played a key role in driving up food prices. Since 2000, higher oil prices have been transmitted to food prices via the distribution of food that mainly uses diesel for energy.
The council said economic growth in South Africa slowed from 2006 to 2007, but was still marginally higher than in 2005. It was expected to slow down further in 2008.
Real consumer expenditure, mainly financed through borrowing, increased in 2007.
Disposable household income started to come under pressure from June 2006 and the debt-servicing costs of households have increased by 75 percent.
The price of food was higher in rural areas than urban areas.
"It appears as if the rate of increase in food prices started to slow and in some cases certain food products actually experienced a decline in prices, for instance, maize meal, if one compares changes in prices from July 2007 to December 2007," said Andre Jooste, a senior researcher with the council.
Thami Bolani, the head of the National Consumer Forum, said that, with petrol prices dropping, it remained to be seen whether consumers got the same benefits as the negatives when fuel prices soared.
The report for 2007 by the National Agricultural Marketing Council, a statutory body under the department of agriculture, found that, on average, wheat product prices increased by 16,32 percent, maize by 20,67 percent, sunflower products by 19,37 percent, rice by 8,65 percent and dairy product prices by 26,81 percent.
The recent high cost of fuel - expected to drop by 45c a litre this week - coupled with accelerating food prices have pushed up inflation.
Basic household items, such as tea and coffee, went up by 12,72 percent, white sugar by 12,55 percent, peanut butter by 9,56 percent, pilchards rose 13,31 percent, and beans by 19,81 percent.
The report, released this week, said prices are closely linked to international commodity price movements and the exchange rate and that the poor were facing the brunt of food price increases.
Nkgasha Tema, a senior researcher with the council, said that, on average, housing, water, electricity, gas and other fuels, transport, food and non-alcoholic beverages made up the largest proportion of consumer spending.
He said net food importing countries would be hardest hit, and this was of particular concern for almost all countries in Africa. Nutrition of the poor is also at risk.
Tema said that, according to the Living Standards Measure (LSM) 1, the poorest group of households spent about 11 percent of income on poultry products. Next came bread, rice and mealie meal.
Middle-class households spent relatively high amounts on white bread, beef, mutton, lamb, poultry and fresh milk. While people in LSM 10 (most affluent) spent 28 percent of their food expenditure on meat products, followed by prepared food at 17 percent. "Certain staple foods, like chicken and rice, have the same penetration across all lifestyle levels."
The review found that fuel costs had played a key role in driving up food prices. Since 2000, higher oil prices have been transmitted to food prices via the distribution of food that mainly uses diesel for energy.
The council said economic growth in South Africa slowed from 2006 to 2007, but was still marginally higher than in 2005. It was expected to slow down further in 2008.
Real consumer expenditure, mainly financed through borrowing, increased in 2007.
Disposable household income started to come under pressure from June 2006 and the debt-servicing costs of households have increased by 75 percent.
The price of food was higher in rural areas than urban areas.
"It appears as if the rate of increase in food prices started to slow and in some cases certain food products actually experienced a decline in prices, for instance, maize meal, if one compares changes in prices from July 2007 to December 2007," said Andre Jooste, a senior researcher with the council.
Thami Bolani, the head of the National Consumer Forum, said that, with petrol prices dropping, it remained to be seen whether consumers got the same benefits as the negatives when fuel prices soared.
- This article was originally published on page 4 of The Sunday Independent on November 02, 2008
Pretoria
