Inflation down on PACSA Food Basket in February 2017


PACSA Monthly Food Price Barometer Report

According to Pietermaritzburg Agency for Community Social Action (PACSA), inflation on the PACSA Food Basket has decreased in February 2017. But it is too soon to tell whether this drop signals the start of a general downward trend in food prices for 2017, or whether it is just a slight decrease after Christmas highs.

In their monthly report, PACSA Monthly Food Price Barometer for February 2017, PACSA said that the uncertainty around inflation and how it affects the PACSA food basket’s Rand-value “remain a serious concern in a context where currently low-income families struggle to afford their basic goods and services; and have to compromise their nutritional food intake and go into debt to cover food shortfalls.” Furthermore, “This concern is heightened because the annual increments on grants have now been set – at below inflationary levels – and workers will still have to wait to see what their annual increases will be,” continues PACSA in the report.

February 2017 saw the prices of all the foods in the ‘big food’ category coming down (maize meal, white sugar and cooking oil, etc). It will take another month or two to confirm that this signals a general downward trend in these core staple foods as not all supermarkets dropped their prices.

A downward trend in the prices of these ‘big foods’ is important because their combined cost takes up 30% (a substantial portion) of the monthly food expenditure of low-income households; and must be secured every month for basic energy and enable meals to be cooked. The prices of the ‘big foods’ is thus critical as it determines how much money is remaining to secure dietary diversity on the plate (that is balanced nutrition of meats, fish, eggs, dairy and vegetables for health and well-being).

Minister Gordhan, in the 2017 Budget, announced that in April 2017, the Child Support Grant would be increased by R20 (5.56%) to R380 and the old-age pension by R90 (5.96%) to R1 600 per month. The annual increments came in lower than the January year on year rates of Headline inflation (6.6%) and even lower than the 11.4% in the CPI Food & Non-Alcoholic Beverages index (this index is important because it provides a more accurate measure of inflationary pressures faced by low-income families as grants are primarily used to secure food.

Below inflation increases on already far too low social grants will undermine the ability of millions of South Africa’s low-income families to secure proper nutritional food this year; and will further undermine all other investments in health, education and economic growth. Investment is required at the front-end of our economy – directly in the pockets of the majority of low-income families – so that all other investments on the support and supply side of our economy can bear fruit.

For the more detailed and insightful PACSA Monthly Food Price Barometer Report (February 2017), visit www.pacsa.org.za.

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