The average cost of a household food basket will cost consumers in South Africa R5 081.94 in the month of July.
This comes as the July 2023 Household Affordability Index, compiled by the Pietermaritzburg Economic Justice & Dignity Group (PMBEJD), was released on Wednesday.
While July brought some reprieve for South Africans after the South African Reserve Bank chose not to hike the repo rate and motorists enjoyed fuel price cuts, consumers are still spending extra cash to meet their grocery needs.
According to the food index data, month-on-month, the average cost of the household food basket increased by R25.48 (0.5%), from R5 056.45 in June 2023 to R5 081.94 in July 2023.
Year-on-year, data revealed an increase in costs, by R333.07 (7.0%), from R4 748.87 in July 2022 to R5 081.94 in July 2023.
Looking ahead, it seems consumers will be in for another harsh economic period, with early data indicating fuel prices could be increasing for the month of August.
It looks like both types of fuel will become more expensive from August.
Thankfully for those with petrol-powered cars, next month’s price hike is likely to be a small one, but owners of diesel vehicles will be hit with a more substantial increase.
Current data is pointing towards an increase in the region of 10 cents per litre petrol, while diesel looks set to go up by about 45 cents.
Meanwhile, the repo rate pause could be short-lived as the next monetary policy frontier will be determined by the US Federal Reserve.
Investors are now assessing more US data to guide the outlook for Fed monetary policy after weekly jobless claims in the US fell to a two-month low last week, cementing expectations that the Fed would hike rates by 25 basis points.
SARB governor Lesetja Kganyago said, globally, monetary policy was likely to remain focused on ensuring inflation continues to retreat, implying policy rates will stay higher.
Kganyago said they expected markets in major financial centres to remain volatile.
“Sticky inflation in major economies suggests that average interest rates in these economies will remain high,” Kganyago said.
“As a result, tighter global financial conditions are likely to persist, raising the risk profile of economies needing foreign capital.”
Kganyago emphasised that the country was not out of the woods yet, adding that decisions on rates will continue to be data dependent and sensitive to the balance of risks to the outlook.
Foods which increased in price in July 2023, by 5% or more, include:
- white sugar (7%)
- salt (5%)
- potatoes (8%)
- curry powder (6%)
- eggs (5%)
- beef liver (6%)
- fish (7%)
- butternut (14%)
- green pepper (9%)
- Cremora (5%)
- apples (5%)
- polony (5%).
Foods which increased in price in July 2023, by 2% or more, include: maize meal (2%), cake flour (4%), sugar beans (4%), soup (2%), tea (2%), full-cream milk (4%), amasi (maas) 3%, gizzards (2%), chicken livers (2%), and peanut butter (3%).
Statistics SA’s latest consumer price index (CPI) for June 2023 showed that headline inflation was at 5.4%, and for the lowest expenditure quintiles 1–3, it is 9.1%, 8.6% and 7.6% respectively.
CPI food inflation was at 11.1%.
Stats SA’s producer price index (PPI) for May 2023 showed agriculture was 2.2%.
In July 2023, food baskets increased in Johannesburg and Cape Town.
Food baskets decreased in Durban, Springbok, Pietermaritzburg and Mtubatuba.
The Johannesburg basket increased by R118.57 (2.4%) month-on-month, and increased by R380.02 (8.0%) year-on-year, to R5 151.51 in July 2023.
The Durban basket decreased by R54.27 (-1.1%) month-on-month, and increased by R169.79 (3.5%) year-on-year, to R5 021.67 in July 2023.
The Cape Town basket increased by R70.32 (1.4%) month-on-month, and increased by R406.53 (8.7%) year-on-year, to R5 054.79 in July 2023.
The Springbok basket decreased by R95.97 (-1.8%) month-on-month, and increased by R381.19 (7.7%) year-on-year, to R5 300.32 in July 2023.
The Pietermaritzburg basket decreased by R1.32 month-on-month, and increased by R379.78 (8.3%) year-on-year, to R4 944.72 in July 2023.
The Mtubatuba basket decreased by R117.46 (-2.2%) month-on-month, and increased by R384.95 (8.0%) year-on-year, to R5 169.28 in July 2023.
BUSINESS REPORT