The Bureau for Food and Agricultural Policy (BFAP) has highlighted that South African food and non-alcoholic beverage (NAB) inflation (hereafter to be called just food inflation, for short) in September was pretty much the same as it had been in August. In year-on-year (y-o-y) terms, food inflation was up 4.7%, but in month-on-month (m-o-m) terms it increased by only 0.6%. However, September was the second month in a row that food inflation ran higher than consumer price index (CPI) headline inflation (which came in at 3.8%). Food inflation contributed 0.9 percentage points (ppt) to the y-o-y CPI headline inflation figure, and 0.1 ppt to the m-o-m number.

In terms of economic factors affecting agriculture, the BFAP noted that the rand had appreciated against the dollar in both y-o-y and m-o-m terms. Y-o-y, the rand appreciated 7.1%, from R18.98:$1.00 in September 2023 to R17.63:$1.00 this past September. M-o-m, the rand strengthened by 2.2%, from R18.03:$1.00 to R17.63:$1.00. The CPI index for “electricity and other fuels” rose 11.5%, y-o-y, and zero percent, m-o-m. For “fuel”, the CPI index dropped -9%, y-o-y, and fell by -3.8%, m-o-m.

The food category which had the highest y-o-y inflation in September was NAB, at 9.6%, followed by dairy and eggs (6.9%), sugar and sugar-rich foods (6.8%), vegetables (also 6.8%), fish (5.8%), bread and cereals (5.4%), fruit (2.9%) and meat (0.9%), with oils and fats seeing deflation of -0.1%. In m-o-m terms, fruit saw the highest inflation (4.2%), followed by vegetables (2%), NAB (1.1%), fish (0.4%), sugar and sugar-rich foods (also 0.4%), bread and cereals (0.3%), meat (0.2%), oils and fats (again, 0.2%), and dairy and eggs (0.1%).

In September, in y-o-y terms, the commonly bought food items (in the order and categorisation given by the BFAP) with inflation equal to or higher than 30% were fruit juice concentrates; and eggs. Those with inflation equal to or greater than 20%, but less than 30%, were sweet potatoes, tomatoes; pineapple, papaya; and instant coffee. Those with inflation equal to or greater than 10% but less than 20% were frozen potato chips, potatoes, rice; cabbage, frozen vegetables; oranges, apples, avocados; dried beans, peanut butter; Ceylon/black tea, Rooibos tea, ground coffee or coffee beans; condensed milk, whiteners; and margarine. Those food items that experienced y-o-y deflation were cauliflower, lettuce, onions, pumpkin; pears, bananas; mutton/lamb (chops, neck); beef (rump steak, corned beef, mince, stew brisket, fillet, sirloin); pork (bacon, chops, fillet, ribs); gouda cheese; sunflower and canola oil; instant noodles.

The cost of the BFAP’s Thrifty Healthy Food Basket (THFB) increased by 5.7%, y-o-y, or by R366, to R3 782.  In m-o-m terms, the increase was 0.3%, or R10. The THFB is composed of 26 nutritionally-balanced food items from all the food groups, and designed to feed a reference family of two adults, one older and one younger child, for a month. Buying it would have cost a low-income family 30.5% of their total income. This was a slight deterioration on August, when the THFB would have absorbed 30.4% of their income.

“[F]ood inflation is expected to remain fairly stable in the short term. Important to note is that this implies that prices are still expected to rise, but at a consistent rate that is much slower than observed through 2023,” stated the BFAP. “While seasonality and normalisation of prices after shocks (causing short- to medium-term shortages) will push price spikes down to trend levels, above inflation labour and electricity cost increases, along with other value chain cost increases, will continue to drive food inflation.”