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Pacsa Monthly Food Price Barometer May 2016

The barometer tracks food inflation on 36 basic food items – Mervyn Abrahams, director – Pacsa.

SIKI MGABADELI:  We are looking now at Pacsa’s Monthly Food Price Barometer for May 2016. It tracks food inflation on 36 basic food items purchased by lower-income households in the city. On a month-on-month basis food prices decreased by 1.65%. Year on year, though, up by 13.3%.

Let’s chat to Mervyn Abrahams, who is director at Pacsa – that’s the Pietermaritzburg Agency for Community Social Action. Thanks very much, Mervyn, for your time this evening. Is the pressure from the drought and the weak rand easing a little, would you say?

MERVYN ABRAHAMS:  Siki, yes, it is easing a bit, at least for this month on month, and we are hoping the change continues, as we see a R32 in value drop month on month.

SIKI MGABADELI:  So let’s look at those. These are the really basic foods, the foods that people are quite dependent on, particularly the most vulnerable in our society. So what are you comparing – what sort of food products?

MERVYN ABRAHAMS:  Siki, the kind of food products we are looking at are essentially things like maize meal and rice, flour and bread and beans, cooking oil, margarine, milk, eggs and a few canned foods like fish and so on. Then also a number of vegetables – carrots and spinach and onions and tomatoes.

And the good news of this month’s food-price barometer is that over the last month we have seen a drop in the price of vegetables, which we are ascribing to a kind of volatility. In fact, the vegetable part of the basket brought the basket overall down. So, for instance, if I might say, spinach for instance came down by R12, onions by R12.50, tomatoes by R12 and potatoes by R9. So those are significant decreases.

SIKI MGABADELI:  And that makes a huge difference because something else that you’ve taken a look at, and a very close one, is on where minimum wages have been set, and you’ve said for a household it’s below what the upper-bound poverty line is in this country.

MERVYN ABRAHAMS:  Yes, essentially because for some time, Siki, what we often do is we look at wages or we look at food as isolated things. What we are trying to do this month is to integrate a number of the economic data.

So when we are looking at wages we have to also look at levels of unemployment. What we are seeing, for instance, among black South Africans, the majority of the population, is that we have 12 million people employed out of 44 million. That means that one worker in effect supports another four persons. So when we look at how far the wage impact stretches in the household, then we have to take four or five people into consideration. And when we do that division we end up with R737 per person [per month], and of course that is about R20 or just under R20 below the upper poverty line.

SIKI MGABADELI:  We’ll have to leave it there. Thanks for your time, Mervyn Abrahams.


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