Potato prices have risen 28% in the last two months, the most of any single ingredient in Bloomberg’s Shisa Nyama Index. Bloomberg’s index tracks the prices of some of the key ingredients in a traditional braai consumed in South Africa’s townships, known as a shisa nyama, using data from the Pietermaritzburg Economic Justice and Dignity group.
“The price of potatoes went mad,” said Brendan Brokensha, who owns three Sodwana Bay eateries, including the Beach Kiosk, where a small serving of chips now costs R35.
Bloomberg’s index tracks the prices of some of the key ingredients in a traditional braai consumed in South Africa’s townships, known as a shisa nyama, using data from the Pietermaritzburg Economic Justice and Dignity group.
The index also includes corn meal, onions, carrots, tomatoes, curry powder, salt, beef, and wors (a type of sausage).
According to the index, prices rose 23% on average in February compared to the previous year. According to the most recent data from South Africa’s statistics agency, this far outpaced the 6.9% increase in overall consumer prices and the 13.8% increase in food costs.
The Shisa Nyama Index also highlights that low-income earners in South Africa will have a difficult 2023, with an unemployment rate of 32.7% and power shortages that have resulted in rolling blackouts every day this year.
Fuel-price increases and heavy rainfall in the first two months of the year have also impacted the cost of some foodstuffs. President Cyril Ramaphosa declared a national state of disaster over the energy crisis on 9 February and one over flooding four days later.
PMBEJD data collectors track food prices on the shelves of 44 supermarkets and 30 butcheries that target the low-income market in and around Johannesburg, Durban, Cape Town, Pietermaritzburg, and the northwestern town of Springbok to compile its household affordability survey.
During the peak tourist seasons in South Africa, Brokensha purchases up to 150 bags of potatoes per week. For most of 2022, a 10-kilogram bag cost R89 at the only supermarket in the small nearby town of Mbwanza, but by the end of the year, the price had risen to R110, he said.
“The excuse was that there was so much rain that the crop was affected,” Brokensha said. Instead of buying locally, he’s switched to buying his potatoes from a local woman who takes a truck northwest to Limpopo to stock up on cheaper produce.
Supply Constraints
According to research conducted by the industry body Potatoes SA, the supply of potatoes fell to its lowest level in at least five years in February, while the average price for all classes of the vegetable rose. The Shisa Nyama Index reported a 41% year-on-year increase in tuber prices in February.
The PMBEJD data shows, a bag of potatoes was most expensive in Springbok last month, at R99.03, followed by the KwaZulu-Natal port city of Durban, at R96.14 — 7% more expensive than the national average.
It’s not only the cost of potatoes that hurt — labour costs also go up every year, said Brokensha, who has limited scope to raise his own prices.
“As a small business owner, when the food prices keep rising, there’s nothing you can do,” he said. “But you can change your portion sizes.” businesstech/bloomberg