Household Food Basket Prices Rise 8.6% In March From A Year Ago

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household food basket prices rise 86 in march from a year ago

Poor consumers are in for a tough time as the cost of a household food basket increased nearly 9% in the year to March in spite of slowing consumer headline inflation, according to the Food Basket Price Monthly Report April 2024.

The National Agricultural Marketing Council (NAMC) yesterday said the 28-item urban food basket rose by 1.0% to R1269.62 in March compared to R1257.23 in February.

However, this represented a year-on-year increase of 8.6%.

The report is a comparative analysis of expenses associated with selected food items in both urban and rural areas, and reveals variations in prices for certain products when purchased in urban versus rural regions.

It showed that urban consumers allocated more of their budget towards Ceylon/black tea, which exhibited the most substantial price difference of R3.87, followed by peanut butter (R3.48), rice (R1.79), a loaf of white bread (R0.87), a loaf of brown bread (R0.68) and white sugar (R0.42) in comparison to their rural counterparts.

On average, NAMC said urban consumers paid R0.80 more for these 11 food items.

The nominal prices for the NAMC urban food basket between March this year and March last year showed that among these 28 items, 13 witnessed price increases that exceeded the 6% inflation target set by the South African Reserve Bank.

NAMC said South Africas food inflation was expected to fluctuate in the coming months, largely due to global increases in price indices for key commodities such as vegetable oils, dairy products and meat.

It said these increases were currently slightly offset by decreases in indices for items such as sugar and cereal.

University of KwaZulu-Natal agricultural economist Professor Maxwell Mudhara said this NAMC food basket better represented what the poor sections of the population consumed.

This year, university students funded by the National Students Financial Aid Scheme (NSFAS) receive R13455 meal allowance per year.

According to the Food and Agriculture Organization (FAO), palm, soy, sunflower and rapeseed oils experienced higher price quotations in March, driven by seasonally lower outputs in leading producing countries, coinciding with firm domestic demand in the southern hemisphere.

Notably, soy oil prices rebounded from multi-year lows, primarily supported by robust demand from the biofuel sector, especially in the United States of America and Brazil. Additionally, higher crude oil prices contributed to the increase in vegetable oil quotations, FAO said.

On the meat side, poultry prices experienced a dramatic increase between March and February 2024, driven by steady import demand from leading importing countries despite ample supplies sustained by reduced avian influenza outbreaks in most regions.

However, the avian influenza and the current drought remain significant challenges for the South African poultry, grain and oil industries, putting pressure on chicken, grain and oil product prices.