The January 2015 Pietermaritzburg Agency for Community Social Action (PACSA) Monthly Food Price Barometer headlines  No drop in food prices as a result of the petrol price drop.  We have not seen a drop in food prices at the supermarket shelves as a result of the petrol price drop.  The price of petrol has dropped by 25% since July 2014, and even considering the time lag, PACSA’s food price barometer shows an average increase in food prices of 0.7% from October 2014 till January 2015 (R1557.63 in October 2014 to R1568.25 in January 2015).  STATS SA’s CPI food and non-alcoholic beverages index similarly showed a 0.9% increase between December 2014 and January 2015.  Many are questioning why we have not seen a drop in food prices.  Fuel is an input cost across the entire food value chain and in all foods.   A significant decrease in the price of fuel as we have seen over the past six months, and as lower fuel prices work their way through the entire value chain, should therefore logically lead to a substantial decrease in the prices of all foods.

The PACSA monthly food price barometer tracks the price of a basket of 36 basic food items from six different retail stores servicing the lower-income market in Pietermaritzburg, KwaZulu-Natal. The basket serves as an index for food price inflation and provides insight into the affordability of food and other essential household requirements for working class households in a context of low wages, social grants and high levels of unemployment.