Food prices increase by 7.8% during coronavirus lockdown

Twenty-one-year-old Angie van Wyk* is a first-year psychology student at the NWU Mahikeng campus. She is currently in Johannesburg, in lockdown like the rest of the country, except her circumstances have become exceptionally dire as the restrictions drag on. Her family is left with little to no income and food prices that continue to increase.

Not only are food prices increasing, but the restrictions on public transport and physical distancing in shopping centres force Van Wyk and her family to shop closer to home, so they are often paying more than normal prices. She says they can only go into the shop for a limited time after standing in queues for an hour or more, leaving them with no choice but to buy what is there. Foods that would last them about a month are now being used up within two to three weeks, so they are forced to buy larger quantities which cost more money.

The Pietermaritzburg Economic Justice and Dignity Group (PMBEJD) is a non-profit organisation that was established in 2018. They have been tracking the prices of food for several years because they believe that the foods on our plates are an indication of a deeper economic structural crisis, and tracking the food prices is a way to show just how low South African wages and social grants are. Currently, the child support grant stands at R440 per month per child, 22% below the poverty line.

Two of PMBEJD’s most recent studies looked at the spike in food prices during the national lockdown and how much more lower-income families are spending on food baskets as a result. From the beginning of March until the end of April, the price of a food basket increased by R252.75, with imported foods showing the biggest increase. Staples like rice have increased by 26%, sugar beans by 18%, cooking oil by 11% and onions by 58%. A food basket consisting of 38 basic essentials has gone up from R3 221.00 to R3 470.92 in the last two months.

On the other hand, StatsSA reported that prices of essential products decreased by 0.5% during level 5 of lockdown with the exception of a few products. StatsSA reports that there was an increase in the first week, but in the following three weeks, the index dropped. In the week 23-30 April, there was a decrease of 0.7%.

Julie Smith, a researcher at PMBEJD, says that inflation of food prices is much higher than corporate sector profiteering and rather about how the economy is structured and performing. She said, “Certainly our food value chains are captured by oligopolies, and there is very little transparency on the actual costs from farm gate to supermarket shelves, but dealing with food price affordability also has to be tackled generally through economic restructuring.”

While everybody has been affected by the Coronavirus in some way, Van Wyk’s family is but one of many who are suffering more than others during this time. Her mother is not working and is receiving no income and her brother is still in primary school, so they rely on her NSFAS subsidy to get by. She said, “There is no worse feeling than knowing you cannot support your family, but I try to encourage her [mother] by telling her that I know she has done what she can.”

The South African government has created a Coronavirus social relief and distress grant of R350 for citizens who meet the strict criteria, and topped-up the child support grant by R300 for the month of May, which is a “temporary provision of assistance intended for persons in such a dire material need that they are unable to meet their families’ most basic needs”. Citizens who are over 18, unemployed, not receiving an income, social grant, unemployment insurance benefit or receiving a NSFAS stipend can apply for the grant. However, because the Van Wyk family do not meet the requirements they cannot benefit from it.

While it is uncertain if prices will return to normal and hope will be restored to suffering South Africans, it is clear that it is a problem that will not end soon. Smith said, “We require a change in our food systems, specifically to include small-scale producers, to shorten food value chains and bring affordable nutritious food closer to the table.”

For Van Wyk and her family, the future is bleak. “We are praying that this [the lockdown] ends soon, otherwise we don’t know what the future holds,” she says.

*Not her real name.

The increase in prices could be a result of:
– Increase in supply and demand.
– Increase in the cost of production due to PPE being required and other strict health protocols.
– Import costs.
– Disruption in the economy.

Why prices differ among retailers:
– Prices are composed of: the price of the raw product, the price of packaging and transport, running costs of the store and advertising.
– Woolworths sell the idea of freshness and a nice display, while Pick n Pay sell the idea of convenience.
– If a retailer sells a lot of one product, they will increase the price to make up for a loss of sales in other products.

Source: Professor Nicola Viegi, Monetary Economics – University of Pretoria.