A historical view on the affordability of the BFAP Thrifty Healthy Food Basket over time The affordability of the BFAP THFB is influenced by food price movements as well as household incomes.
From January 2019 to March 2022 the cost of the BFAP basket increased by R547 (+21.5%), compared to a smaller increase of 17.3% in the CPI for food and non-alcoholic beverages. Thus, during this period, the cost of basic healthy eating increased at a higher rate than food inflation, pointing to the increasing challenge of eating a basic healthy diet in South Africa. During this period the four-member reference household, with an income consisting of two minimum wages, supplemented by child grants and school meals for the the two children, had to spent between 27.7% and 30.4% of their total income on food. This proportion increased between mid-2019 to May 2021, then declined (despite fluctuations) towards 2022.
The FAO Food Price Index (FFPI), a measure of underlying agricultural commodity prices, reached a new all-time high in March 2022, rising by 12.6% from February 2022 and by 33.6% from March 2021. Year-on-year inflation was particularly high for vegetable oils (+56%), cereals (+37%), dairy (+24%), sugar (+23%) and meat (+19%). Major drivers of food inflation internationally include: • Production and export disruptions due to the Russia-Ukraine war (e.g. affecting grains, oilseed products and poultry); • Concerns over US crop conditions; • Strong demand (e.g. milk powders and butter in Asian markets, and internal demand for dairy and meat in Western Europe); • Avian flu outbreaks pushing up poultry prices; • Easter demand fuelling price increases in meat in particular; • Ongoing trucker strikes in Argentina causing severe delays in delivery of cereals and oilseeds to ports for exports • Rising crude oil prices leading to increased demand for sugarcane for ethanol production; • Generally elevated energy and input costs. These global factors have driven inflation higher in many parts of the world in March 2022. Food inflation in South Africa was lower than the food inflation rates reported for Zambia, Kenya, Brazil and the USA (Figure 2), due to a combination of strong domestic production prospects, constrained spending power influencing demand and strengthening of the Rand exchange rate through March 2022.
