SOUTH AFRICANS SEE HUGE SPIKE IN PRODUCT PRICES
2020 will forever be remembered as a year that crushed the world economy. Due to the horrific crash and downwards spiral, South Africans are feeling the financial pressure in several departments. South Africa’s consumer price index (CPI) has climbed by a shocking 3.3% in annual terms in October.
This increase is driven largely by rising prices for food and non-alcoholic beverages.
Statistics South Africa reported on 25 November that this is the biggest annual rise since March, when the rate was 4.1%. The monthly increase in October was 0.3%, an increase from the 0.2% which was recorded in both September and August.
South African's can feel the pressure in their monthly grocery shopping, as prices in the food and non-alcoholic beverages category jumped by shocking 1.4% between September and October. This event lead to an annual increase of 5.4%, the biggest annual rise for this category since September 2017.
South African's have been shocked by the increase in various different products. Some of the largest annual price increases were recorded with fruit, going up 13.9%; oils and fats up by 9.7%; sugar, sweets and desserts up by 9.7%; tobacco up by 7.7%; milk, eggs and cheese up by 6.5%; and both water and electricity up by 6.0%. Even insurance went up by 7.6% and financial services increasing by 7.4%.
After already paying way more for some of the basic every day necessities, all food categories were also recorded above headline, and has increased in October with the exception of bread and cereals, with 3.3%.
Non-alcoholic beverages has also gone up, with a sizeable gap between hot and cold, where hot drinks going up by 6.1%, and cold drinks by 1.7%. Stats SA highlighted that tea was the main driver behind the rise in hot beverage prices, as black tea prices jumped by 3.9% in October, resulting in an annual rise of 10.4%.
Not only did tea go up in price, but the other ingredients to make a cup of tea has also spiked. Milk prices have seen a huge increase, with full cream long-life milk increasing by 8.1%. If you are a sugar lover, the price of white sugar has drastically increased by 13.9% over the same period.
Rooibos tea, on the other hand, has risen at a much slower 3.3% over the last year. However, despite the slower growth in price, rooibos is still more expensive than black tea.
This is a shocking time for every South African to live in while, at the other end of the spectrum, tourism and travel activity continues to be subdued as the country slowly eases its lockdown restrictions.
It's not all doom and gloom, as a number of categories in the inflation basket recorded an annual fall in prices in October, which include fuel at -9.1%, packaged holidays with -3.7%, and hotels with -3.3%.