After five consecutive months of decline, South African food and non-alcoholic beverage (NAB) inflation – hereafter to be referred to simply as food inflation – increased again in September, but only slightly, the Bureau for Food and Agricultural Policy (BFAP) has pointed out in its latest Food Inflation Brief. Last month, the country’s year-on-year (y-o-y) food inflation rate was 8.1%, which was 0.1 of a percentage point higher than the figure for August. In month-on-month (m-o-m) terms September’s food inflation was 0.6%.

Last month’s food inflation contributed 1.4 percentage points to the country’s y-o-y consumer price index (CPI) headline inflation rate of 5.4%. As September also saw CPI headline inflation increase, and as this increase was greater than that for food inflation, the gap between food inflation and CPI headline inflation continued to narrow. (At its highest, in April, food inflation had been 7.1 percentage points higher than CPI headline inflation.) In m-o-m terms, CPI headline inflation last month had been 0.6%, identical to that for food.

The BFAP noted that the United Nations Food and Agricultural Organisation’s (FAO’s) global Food Price Index for September had recorded a y-o-y drop of 10.7% (although sugar prices had risen), and a m-o-m decrease of 0.1% (although sugar prices again went up, as did those for cereals). Against the dollar, South Africa’s currency saw a y-o-y depreciation of 8.1% last month, from R17.56:$1.00 in September last year to R18.98:$1.00.

“Global market dynamics remain an important driver of agricultural commodity prices and food inflation in South Africa, but in many instances the depreciation in the Rand exchange offset much of the reduction in the FAO food price index,” explained the BFAP in its report. “At the same time, domestic factors such as loadshedding continue to drive food inflation, both directly through additional costs in the chain, and indirectly through its influence on the supply of irrigated commodities.”

The food categories with the highest y-o-y inflation in South Africa last month were sugar-rich foods (at 17.7%), vegetables (15.3%), dairy and eggs (11.2%) and bread and cereals (9.2%). However, for all four of these categories, the y-o-y inflation rate in September was lower than in August. Next came fish (8.7%), NAB (8.6%), fruit (6.7%) and meat (3.8%). These four food categories recorded higher y-o-y food inflation last month, compared with August. In sharp contrast, last month oils and fats saw y-o-y deflation of 7.7%.

Common food items which last month recorded y-o-y inflation equal to or higher than 30% were (in the order given by the BFAP) onions, cauliflower, potatoes, and brown sugar. Food items with inflation of 20% to just under 30% were rice, bananas, pears, broccoli, sweet potatoes, polony, frozen hake, Ceylon tea, white sugar, and soup powder. Food items with inflation of 10% to just under 20% were maize meal, papaya, carrots, cucumber, pumpkin, mushrooms, cabbage, beef (corned and extract), bacon, chicken (fresh portions and giblets), frozen fish fingers, peanuts, canned baked beans, milk cheese, yoghurt, whiteners, coffee, fruit juice, mineral water, sugar-rich foods, baking powder, spices, instant yeast.

Those food items which saw y-o-y deflation last month were (in the BFAP’s order) white bread, pineapples, oranges, canned mixed vegetables, sweet peppers, beetroot, tomatoes, beef (mince, chuck, T-bone, sirloin, stew, rump steak, fillet, offal), mutton/lamb (rib chops, stew, neck, leg), pork chops, fresh whole chicken, eggs, fresh cream, and sunflower and canola oil.

The price of the BFAP’s Thrifty Healthy Food Basket (THFB) increased, y-o-y, by 6.6%, or R343, last month. But in m-o-m terms, it decreased by 0.2%, or was down by R7.09. The nutrionally-balanced THFB is composed of 26 food items from all the food groups. It is designed to feed a reference family of two adults, and one older and one younger child, for a month. Assuming that the family is earning two minimum wages and is benefitting from child grants and school meals, the THFB would cost 31.1% of its total income.