With the festive season fast-approaching, annual consumer inflation hit a seven-month high in October, driven largely by rising prices for food and non-alcoholic beverages.
The Consumer Price Index (CPI) – which measures monthly changes in prices for a range of consumer products – has risen by 0.3% in October, meaning that citizens may feel the pinch more so than they already have in an extremely difficult financial year.
Headline inflation was 3,3%, an increase that constitutes the biggest annual rise since March when the rate was 4,1%. Annual consumer price inflation rose to 3,3% in October 2020, up from 3,0% in the previous month.
Food and beverage prices record biggest spike since 2017
Stats SA said that the food and non-alcoholic beverages – which jumped by 1,4% on average between September and October – increased by 5,4% year-on-year, and contributed 0,9 of a percentage point to the total CPI annual rate of 3,3%. Not since the country was emerging out of drought in September 2017 has this increase been recorded.
Food security and the rising price of import costs mean that this year’s Christmas lunch is going to be harder on household piggy banks, with the following increases recorded:
- fruit (13,9%);
- oils and fats (9,7%);
- sugar, sweets and desserts (9,7%); and
- milk, eggs and cheese (6,5%).
“All food categories recorded above headline increases in October with the exception of bread and cereals, which registered an increase on par with the headline rate (3,3%),” they said.
Not your cuppa tea?
Stats SA said that one of the main drivers of the increase in hot beverage prices was tea, and warned that your daily (or hourly) cuppa is going to be more expensive going forward.
“If you are an avid tea drinker, it might be disheartening to learn that tea was the main driver behind the rise in hot beverage prices. Black tea prices jumped by 3,9% in October compared with September, resulting in an annual rise of 10,4%,” they said.
“It’s not only your cup of tea that’s become more expensive. Prices of popular condiments have also risen sharply. Milk prices have seen large increases, with full cream long-life milk 8,1% more expensive than it was a year ago,” they said.
The price of white sugar also increased by 13,9% over the same period.
Even the price of filling your kettle and switching it on to boil has risen, with municipal water and electricity tariffs both increasing on average by 6,0% when they were surveyed in July.
“Rooibos tea, on the other hand, has risen at a much slower 3,3% over the last year,” they said. “However, despite the slower growth in price, rooibos is more expensive than black tea. Rooibos will set you back an average of 57 cents per tea bag, if we assume that a typical tea bag contains 2,5g of tea.”
CPI shows increase in housing prices, tourism costs dip
Housing and utilities increased by 2,8% year-on-year, and contributed 0,7 of a percentage point to the accumulative CPI, with “miscellaneous goods and services” increasing by 6,7% year-on-year, contributing 1,1 percentage point too.
They said that the annual inflation rates for goods and for services were 2,6% and 3,8% respectively, and that provincial annual inflation rates ranged from 2,9% in Gauteng and Mpumalanga to 3,9% in Western Cape.
Travel and holiday inflation dampened in the last month as COVID-19 lockdown restrictions were eased, with fuel costs and accommodation prices dropping to adjust to a weakened market.
“Tourism and travel activity continues to be subdued as the country slowly eases its lockdown restrictions,” they said. “A number of categories in the inflation basket recorded an annual fall in prices in October, most notably fuel (-9,1%), package holidays (-3,7%) and hotels (-3,3%).”