The Bureau for Food and Agricultural Policy (BFAP) has highlighted, in its latest 'Food Inflation Brief', that South African food and non-alcoholic beverage (hereafter to be referred to simply as food) inflation had “gained significant further momentum” during last month. In month-on-month (m-o-m) terms, it had been 0.5%, while in year-on-year (y-o-y) terms it had been 11.9%. Food inflation had contributed 2.0 percentage points to the consumer price index headline inflation figure of 7.5% in September.

“The major driver behind South Africa’s double-digit food inflation is the surges in global grain and oilseed prices, exacerbated by a weakening exchange rate,” explained the BFAP. “As was observed in previous editions of this report, surges in commodity prices take between two to three months to show up in associated retail food prices, hence the Bread and Cereal inflation of 19.3% in September is the result of high grain commodity prices in July, when average white maize prices were just above R4 300 per ton. This was 34% higher than the corresponding period in the previous year.”

Although, as noted above, bread and cereals recorded a y-o-y inflation of 19.3% in September, they were the food category with the second highest inflation during that month. The category which recorded the highest y-o-y inflation was oils and fats, at 29%. In third place was vegetables, at 10.6%, followed by, in descending order, meat (9.9%), fish (9.1%), milk and cheese and eggs (9%), sugar and sugar-rich foods (8.9%) and non-alcoholic beverages (8.8%). Fruit actually recorded deflation of 0.2%.

In m-o-m terms, the food categories which experienced the highest inflation were bread and cereals, and sugar and sugar-rich foods, which each recorded 1.3%. They were followed by vegetables (0.9%), milk and cheese and eggs (0.7%), meat (0.5%). Non-alcoholic beverages saw deflation of 0.2%, fish recorded deflation of 0.3%, and, in sharp contrast with their y-o-y increase, oils and fats recorded m-o-m deflation of 6.1%.

The brief report recorded a long list of food items which had y-o-y inflation of more than 10% last month. To summarise, and in the BFAP’s order, these were most types of beef, a wide range of vegetables (fresh, canned and frozen), oils and fats, non-alcoholic beverages (fruit juices, coffee and tea), a wide range of starch-rich foods, ham, fruit (apples, pineapples and oranges), tinned baked beans, chicken (whole fresh and non-individually quick frozen, or IQF, portions), other foods (whiteners and salt), sugar-rich foods (sweets, chocolates, ice cream), most dairy foods, and eggs.

The list of foods which experienced y-o-y inflation of between 6% and 10% was much shorter. Again in the BFAP’s order, they were fish (canned pilchards, canned tuna), powdered milk, beef (chuck and sirloin), bacon, peanut butter, dairy (sour milk and yoghurt), non-alcoholic fizzy drinks, IQF chicken portions, and mutton and lamb rib chops.

The price of the BFAP’s Thrifty Healthy Food Basket (THFB), designed to feed a family of two adults and one older and one younger child for a month, rose by 0.6%, or R18, m-o-m, and by 14.8%, or R432, y-o-y. Assuming the family was earning two minimum wages, receiving child grants and benefitting from school meals, the THFB would consume 31.4% of their total income; in August, this proportion would have been 31.2%.

The BFAP expected global and local factors to keep food inflation high for the rest of this year and for the first half of next year. However, the weather forecasts for the South African summer agricultural season remained good and the BFAP expected local farmers to plant the largest area under summer crops for 20 years. This would prevent a local supply shock and should result in South African crop prices remaining at export parity levels. But what these export parity levels would be, would be beyond the control of South African agriculture.