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Chicken off the table for poor South Africans after prices surge

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Chicken, South Africa’s favourite meat, is becoming too expensive for the nation’s low-income earners, leaving them with dangerously few options for sources of protein.

Bloomberg’s Shisa Nyama Index shows that 10 kilograms of frozen chicken portions – sufficient to feed an average low-income family of seven for a month – is the costliest item on their grocery list. A R378.9 bag of chicken in November equates to a fifth of spending on food for someone dependent on South Africa’s monthly old-age grant. The price has risen 9% year-on-year.

Crunching data from the Pietermaritzburg Economic Justice and Dignity (PMBEJD) group, the index tracks the prices of some key ingredients in a traditional braai in South Africa’s townships — known as a shisa nyama. Corn meal, onions, carrots, tomatoes, curry powder, salt, beef and boerewors are among the items that make up the index.

To compile its survey, PMBEJD data collectors track food prices on the shelves of 44 supermarkets and 30 butcheries that target the low-income market in Johannesburg, Durban, Cape Town, Pietermaritzburg and the northwestern town of Springbok.

The index exposes the impact of inflation on South Africa’s most vulnerable consumers. In November, the Shisa Nyama Index showed prices rose 18% from a year earlier. That outstripped the 7.4% increase in overall consumer prices as measured by South Africa’s state statistics agency, and was faster than the 10.1% it measured for the lowest income decile earning up to R20 140 per month.

Officially, food prices climbed 12.8% year-on-year, driven by the higher cost of bread, cereals, milk, eggs, cheese and meat, according to local lender Nedbank Group.

South Africa’s central bank last month revised its forecast for food-price inflation in 2022 to 8.8% from 8.1%, due in part to a weaker exchange rate.

Read: Sarb ratchets repo rate by another 75bps

The rand has depreciated 7.7% against the dollar since January, ranking it among the world’s 10 worst-performing major currencies this year, data compiled by Bloomberg shows.

In addition to the effect of the weakening rand, poultry prices have risen as a result of global supply constraints. Those have emanated from high feed costs, the ongoing war in Ukraine and the spread of avian flu across the northern hemisphere, according to the Bureau for Food and Agricultural Policy.

“Meat is considered to be a luxury product within the consumption basket of most South African consumers,” the bureau said in its 2022 baseline report. “Per capita consumption growth has slowed drastically, reflecting the impact of the poor economic growth and diminished spending power.”

South Africa’s low-income earners are left with boerewors as the cheapest source of protein and even then, at R140.40 for 2 kilograms, it would be out of reach for a family trying to get by on a single child-support grant that pays R480 a month. That money would have to go to basics like corn meal, with 30 kilograms costing almost R300, according to the PMBEJD.

The South African government has a National Food and Nutrition Security Plan, with a number of targets and deadlines set for next year. Since the plan was introduced in 2018, the country has suffered an economic decline, rising unemployment and costs associated with the coronavirus pandemic and the bailout of state institutions.

“Poor South Africans need an affordable source of protein” to help them avoid relying on a less nutritious, high-carbohydrate diet, the opposition Democratic Alliance’s shadow finance minister, Dion George, said in October. “At least 27% of South Africa’s children below the age of five are stunted due to malnutrition. Millions of schoolchildren are unable to concentrate and learn. Worker productivity is impacted, and our society is increasingly unstable.”

© 2022 Bloomberg

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