The Bureau for Food and Agricultural Policy (BFAP) has reported that food inflation in South Africa last month was higher than expected, at 6.6% year-on-year. Food inflation contributed 1.1 percentage points to the consumer price index headline inflation figure of 5% for the month. On the other hand, in month-on-month terms, September’s food inflation rate showed zero increase over the figure for August (which had also been higher than expected).

“Numerous driving factors highlighted in our previous inflation briefs remain relevant, such as high global commodity prices, high red meat prices on the back of lower slaughter numbers, [rand] exchange rate weakening and rising input costs,” noted BFAP.

The only food category that saw a year-on-year decrease in prices was fruit, which recorded a decline of 2.1%. As in August, the food categories which recorded the highest year-on-year inflation in September were oils and fats (22.4%) and meat (10.3%). For other categories, the rates were 5.8% for sugar and sugar-rich foods, 5.5% for milk, cheese and eggs, 5.2% for fish, 4.2% for vegetables, 3.2% for bread and cereals and 2.8% for non-alcoholic beverages.

In month-on-month terms, however the picture was different. No fewer than five of the above food categories registered price declines. They were fruit (down 1.2%), fish, meat and vegetables (all down by 0.2%), and non-alcoholic beverages (down 0.1%), while bread and cereals and milk, cheese and eggs all registered no change. Oils and fats increased by 0.1% while sugar and sugar rich foods jumped by 1.7%.

Individual food items whose prices increased by more than 10% last month (in year-on-year terms) were (in BFAP’s order) sunflower oil, dried beans, polony, super maize meal, individually quick frozen chicken and mutton and lamb. Food items whose prices rose by between 6.6% and 10% were tinned pilchards, potatoes, brick margarine, pasta, sugar, tuna and pork.

BFAP has constructed a ‘thrifty healthy food basket’ that would provide healthy eating for low income South Africa households (of two adults and two children each) for a month. It was composed of 26 food items from all food groups. The price for such a basket last month was 2.8%, or R79, higher last month in year-on-year terms, but 2.5% (or R75) lower in month-on-month terms. Buying the thrifty healthy food basket in September would have consumed 29% of a low income family’s earnings.

“Our view is that inflationary figures for the rest of 2021 can continue to surprise towards the upside as meat prices are expected to remain firm as we approach the festive season,” stated the BFAP. International prices were also expected to remain firm, owing to supply constraints for grains, oils and fats, beef and lamb, from different regions of the globe, for different reasons. Within South Africa, expected increases in the prices of petrol and diesel would increase agricultural production, processing and distribution costs. Consumers would, however, only be able to absorb some of these price increases, as leading economic indicators signalled that they were already under pressure.