Soaring cost of chips drives up Shisa Nyama Index

The village of Sodwana Bay in remote northeastern KwaZulu-Natal is renowned among scuba divers and deep-sea fishermen for its sharks, rays, marlin and seahorses. Lately it’s been getting a reputation for expensive fries.

The cost of potatoes jumped 28% over the past two months, the biggest increase of any single ingredient in Bloomberg’s Shisa Nyama Index.

Read: Hefty anti-dumping duties against imported frozen potato fries lapses

“The price of potatoes went mad,” said Brendan Brokensha, who owns three Sodwana eateries including the Beach Kiosk, where a small serving of fries now costs R35.

Crunching data from the Pietermaritzburg Economic Justice and Dignity group, Bloomberg’s index tracks the prices of some of the key ingredients in a traditional barbecue consumed in South Africa’s townships — known as a shisa nyama.

Corn meal, onions, carrots, tomatoes, curry powder, salt, beef and wors — a type of sausage — are among the other items that make up the index.

The gauge shows prices on average rose 23% in February from a year earlier. That far outstripped the 6.9% increase in overall consumer prices and 13.8% climb in food costs, according to the latest data from South Africa’s statistics agency.

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The Shisa Nyama Index suggests it’s going to be a tough 2023 for low-income earners in South Africa — which has 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 February 9 and one over flooding four days later.

To compile its household affordability survey, 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.

During South Africa’s peak tourist seasons, Brokensha buys as many as 150 bags of potatoes a week. A 10-kilogram (22-pound) bag cost R89 at the only supermarket in the small nearby town of Mbwanza for most of 2022, but toward the end of the year, the price jumped to R110, he said.

Read: January inflation slows to 6.9% y/y in SA

“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

Industry body Potatoes SA’s research shows that the supply of potatoes declined in February to the lowest in at least five years, while the average price for all classes of the vegetable rose. The Shisa Nyama Index recorded a 41% year-on-year increase in the price of the tubers in February.

Read:
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The PMBEJD’s data shows that last month, across the five big centers it covers, a bag of potatoes was most expensive in Springbok at R99.03, followed by the KwaZulu-Natal port city of Durban, at R96.14 — 7% more costly than the average price.

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.”