PACSA Monthly Food Price Barometer - May 2015

Food Price inflation for working class households up 6.5 percent since January 2015
The May 2015 statement provides a snapshot of the trends in food price inflation since January 2015. Over the last five months, the cost of the total Pietermaritzburg Agency for Community Social Action (PACSA) food basket increased by 6.5 percent or R101.95 from R1568.25 in January 2015 to R1 670.20 in May 2015. The core drivers of inflation on the PACSA food basket were the starches (increased by 7.8 percent), animal proteins (increased by 7.1 percent), vegetables (increased by 11 percent) and sugar (increased by 8.7 percent). All four of these groups increased by levels significantly higher than Consumer Price Index (CPI) headline inflation – which averaged 4.3 percent over the last five months; as well as above the CPI indicator for food and non-alcoholic beverages, which averaged 5.7 percent over the last five months. 
The high levels of inflation on the starchy foods are of concern because households prioritise the purchase of starches before any other category of food. High prices on the starches means that fewer monies are available to secure a diversity of food required for good health and well-being. The impact of this is serious and manifests itself in the inability to resist common illnesses and infections, limits growth and development of particularly children’s muscle and cognitive capacity and means that workers fatigue more quickly and get sick more often. We are further noticing that for a growing number of households; the possibility of securing a diverse variety of foods has long been abandoned because the burden of affordability has become overwhelming. It is for these households for whom starches form almost the entirety of the daily meal, that high inflation on the starches erodes even the ability to secure energy and keep hunger at bay. The price of a 25 kilograms bag of maize meal, the staple food for the majority of South Africans, increased for the fifth consecutive month, to a total of 15 percent or R22.17 between January 2015 and May 2015 from R147.82 to R169.99. The prices of white and brown bread increased by 6.1 percent (an increase of R0.64 per loaf to R11.02) and 5.9 percent (an increase of R0.55 per loaf to R9.92) respectively.
The PACSA food basket is made up of 8 different food categories.  The food price inflation on these categories from January 2015 to May 2015 is presented below:
  • Starches: Increased by 7.8 percent (R35.65) from R455.32 to R490.97;
  • Sugar: Increased by 8.7 percent (R8.65) from R99.65 to R108.30;
  • Dry beans, canned beans: Increased by 1.1 percent (R1.09) from R95.77 to R96.86;
  • Fat, oil: Increased by 3.7 percent (R3.52) from R96.12 to R99.64;
  • Milk, maas: Increased by 1.4 percent (R0.74) from R51.73 to R52.47;
  • Meat, eggs, fish: Increased by 7.1 percent (R33.10) from R463.96 to R497.06;
  • Vegetables: Increased by 11 percent (R17.81) from R161.93 to R179.74; and
  • Miscellaneous: Increased by 1 percent (R1.40) from R143.77 to R145.17.

 This increase in the cost of a basket of food has to be considered against the context of a deepening affordability crisis. Most households are under immense financial strain with 86 percent of South Africans in debt. The high levels of indebtedness are being driven by the situation whereby the majority of our workers earning salaries and unemployed caregivers or aged persons receiving grants do not earn enough to support their families. The average minimum wage set across sectoral determinations for 2014 was in the region of just R2362.36 per month - for a household of four people this provides R590.50 per person per month - below the upper bound poverty line of R779 a month. The R10 (3.1 percent) increase on a Child Support Grant and R60 (4.4 percent) increase on an old age pension granted by Treasury in February 2015 has already been overrun by high levels of food price inflation. Public sector workers only received a 7 percent increase in their salaries. The household debt to income ratio means that for every R100 income, R78 goes to repay debt and only R22 is left to buy food, public and municipal services. Our unemployment statistics for the 1st Quarter of 2015 are at 26.3 percent, the highest levels since 2003. The majority of South African households live on wages that are too low to absorb rising increases in food, electricity and transport and therefore remove the possibility of living at a level of basic dignity. That the dreams which shaped the Freedom Charter at Kliptown on 26 June 1955 have not been realised is an indictment for a mother who is now forced into the shame of having to tamper with her electricity because she cannot afford to feed her family or keep them warm.
Appendix 1: Notes and References for Table 6

Total household income
We have selected 5 total household income scenarios:
Household A:  R1 410 = 1 old-age pension (National Treasury, 2014.  Budget Speech: 13).
Household B:  R2 362 = the average minimum wage set by the Employment Conditions Commission across sectoral determinations for 2014 was R2362.36.
Household C:  R3 200 was selected because 60 percent (98 680) of all Pietermaritzburg households earn between zero and R3200 a month (STATSSA, Census 2011).  This total household income figure provides for 1 employed member receiving minimum wages (earning R1200 – R2000 a month, see URL with the additional income found by unemployed members through alternative and insecure means.
Household D:  R4 660 is the average monthly consumption expenditure for Black South African Households (STATSSA, 2012).
Household E:  R8 000 is where we think the national minimum wage should be located if households are to have the possibility of accessing a basic level of dignity.
Burial insurance
This figure of R200 presents basic family burial insurance costs for a low-income household registered with insurance companies which serve the low-income market (2014). Burial insurance has been included as an essential and prioritised expense because interviews with households reveal that burial insurance is typically paid before any other expense and very seldom defaulted as a mechanism to ensure food is secured. 
Electricity and water
The electricity cost is calculated on 350kWh per month. This is the average consumption for low-income households in Pietermaritzburg. We use the prepaid electricity tariff of R1.3301 per kWh because prepaid meters are installed in the homes of low-income households. The 2014/15 rand value is R465.54 per month (excluding transport and time costs of buying tokens). Households on prepaid meters in Pietermaritzburg are excluded from accessing free basic electricity.
The water expense is calculated on a fixed monthly charge for a non-metered household.  This is a typical scenario for low-income households living in RDP housing in Pietermaritzburg. The 2014/15 charges on an unmetered water supply is R76.20 per month (includes VAT). The figure in the table is the sum of electricity and water.
Transport costs
The transport cost is calculated for a household living outside the CBD, given that apartheid geography has not changed and low-income Black African households still live outside the CBD and far from places of work.  It is calculated on 1 kombi trip at R11 or R22 return (Pietermaritzburg kombi charges, July 2014).  The R660 is calculated as follows:
20 trips to work [20 X R22 = R440] + 5 trips to town for work/study /shopping/church etc. [5 X R22 = R110] + 1 long distance trip (we use Durban as the destination) [1 X R110].
This figure has been derived from a focus group, it has its basis in the experience of women with children; it provides the possibility for stationery (± R500 per annum); Carlton paper and toilet paper (R50 once or twice a year); School fees (± R250 once or twice a year); School computer access (± R100 a month); contribution to transport costs.
Communication and media
This figure is arbitrary; it provides R150 per household per month - for newspapers, airtime, photocopying, etc.
Clothing and footwear
This figure is arbitrary; it provides roughly R1 000 each for each member in a family of five. The annual figure of R5 000 is divided by 12 months to give R416.66 per household per month. Note that for children, the R1 000 allocated may cover school clothes and shoes for a year but will exclude other clothes worn at home.
Domestic and household hygiene products
This figure presents the monthly price of personal and domestic hygiene products tracked through PACSA’s barometer. This data and the products tracked were reweighted from October 2014. The new weights are based on conversations held with women, conducted from June-August 2014. Personal hygiene products tracked include:  toilet paper [1ply x 20 rolls], bath soap [200g x 6], toothpaste [100ml x 3], sanitary pads [pack of 10 x 2], Vaseline [250ml x 2], face & body cream [big bottle x2], roll-on [normal x 4], spray deodorant [big sprays x2], shoe polish [100ml x1]. Domestic hygiene products tracked include:  dishwashing liquid [750ml x1], washing powder [2kg x1], green bar soap [bars x4], toilet cleaner [750ml x 1], kitchen cleaner [750ml x1] and jik [750ml x1].
Cultural obligations
This figure is arbitrary; it provides R350 per month - includes monies for contributions to funerals, weddings, religious and cultural ceremonies, and possible intra and inter family and community financial assistance.
The Pietermaritzburg Agency for Community Social Action (PACSA) is a faith-based social justice and development NGO that has been in operation since 1979. PACSA operates in the uMgungundlovu region of KwaZulu-Natal, South Africa and focusses on socio-economic rights, gender justice, youth development, livelihoods and HIV and AIDS. Our work and our practice seek to enhance human dignity. We are convinced that those who carry the brunt of the problem must be a part of the solution - at the heart of PACSA’s core strategy is the notion “nothing about us without us.”
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