With rising food costs, Christine Dzalamu is struggling to make ends meet.
The mother of three runs a small takeaway in a busy part of Cape Town’s CBD.
As she fries chicken, Dzalamu recounts how her business has struggled to make a profit over the past three years.
“First, it was the Covid-19 pandemic. Then the price of cooking oil used for the main food items I sell – fried chicken and chips, and fat cakes – shot up astronomically.“
Dzalamu, like others in the takeaway business, struggles to make a profit as the price of bread and fresh produce, including potatoes, has also increased.
"I buy 10kg of flour for R130, a 7kg bag of potatoes costs R70 and two litres of cooking oil for R80. That's beside the other input costs, including gas, which has also increased. I am just hanging in so I can feed my family. " Sometimes I cannot pay the school fees,“ she said.
This week, the Competition Commission (CC) launched an investigation into whether the increasing price of bread, sunflower oil, maize meal and fresh produce is justified.
“Opportunistic prices are possible, especially if there's an expectation that costs will rise,” the commission said.
Previously the commission highlighted “opportunistic behaviour” by cooking oil processors, exposing the growing margins relative to input costs.
“While those have been reversed to a large extent, the concern now is that retailers have used that opportunity to raise margins in cooking oil and bread staples.”
The commission said it was also investigating the poultry value chain.
“When imports from the European Union (EU) were banned in response to the outbreak of avian flu, domestic producer prices increased at the same time, despite the industry having negligible export exposure,” said the commission.
Various organisations and sectors have welcomed the investigation news as the cost of certain food items rises unabated.
A recent Bureau for Food and Agriculture Policy report noted CPI headline inflation increased by 0.1 percentage points in February to 7.0%.
Food inflation, rising for almost a year, increased by a further 0.2 percentage points to 13.6% in February.
In March, the Household Affordability Index, which tracks food price data from 44 supermarkets and 30 butcheries in townships across four provinces, including the Western Cape, also showed the average cost of a food basket rose by 11.6% from the same period last year, from an average of R4 450.09 to R4 966.20.
Some of the food items that have increased in price include potatoes (8%), tomatoes (6%), carrots (23%), frozen chicken pieces (2%), tea (3%), full cream milk (3%), maas (3%), eggs (3%), cabbage (3%), tinned pilchards (3%), canned beans (3%), bananas (3%), white bread (2%), and brown bread (2%).
The Pietermaritzburg Economic Justice & Dignity Group’s programme director, Mervyn Abrahams, whose organisation tracks the food basket, said the food value chain was not transparent.
“We know that global prices have come down significantly since the start of the Russia-Ukraine conflict. Hopefully, the investigation will make us understand where the problem lies in the value chain,“ he said.
A recent Stats SA report assessing food inadequacy and hunger showed about 23.6% of South Africans were affected by “moderate to severe“ food insecurity in 2020, while almost 14.9 % experienced food insecurity in 2021.
Stellenbosch University academic Professor André Jooste said the Covid-19 pandemic disrupted food supply chains, which could have negatively impacted food security regarding access and affordability.
“South Africa is considered food secure, but the main challenge is household food security for poor households, both in rural and urban settings, with women-headed households as a particular concern.”
Jooste said load shedding added high costs since investments in stable electricity supply were required to ensure continuous operation of, among others, processing facilities, cold stores for food (especially fresh produce) and packing facilities.
“The combination of factors puts more pressure on vulnerable communities and individuals. However, our farmers are doing their best to produce the commodities in the country. They are some of the best there are,” he added.
Jooste called for a reduction in food prices and the creation of jobs.
Weekend Argus.