South African food and non-alcoholic beverage (NAB) inflation (hereafter to be referred to just as food inflation, for short) decelerated again in July, in year-on-year (y-o-y) terms, to 4.5%, the Bureau for Food and Agricultural Policy (BFAP) has reported, in its latest Food Inflation Brief. And, for the fifth month in a row, food inflation was below Consumer Price Index (CPI) headline inflation, although only slightly (CPI headline inflation running at 4.5% y-o-y last month). Month-on-month (m-o-m) food inflation in July was zero percent. (M-o-m CPI headline inflation last month was 0.4%.)

Regarding background factors that affected local food and NAB prices, last month the rand depreciated against the US dollar by 0.3%, y-o-y, and by 0.9%, m-o-m. The CPI index for “electricity and other fuels” rose 12.1% y-o-y and jumped 11% m-o-m. That for “fuel” showed a 4.5% y-o-y increase, but a -3.6% decrease, m-o-m. Overall, the sector was seeing rising costs in its value chain, noted the BFAP.

The food categories and items which showed the highest y-o-y inflation last month were NAB (10.1%), sugar and sugar-rich foods (8.3%), dairy and eggs (6.4%), bread and cereals (5.6%), fish (4.7%), vegetables (3.4%), fruit (2%) and meat (1%), while oils and fats showed depreciation of -0.1%. The BFAP also zoomed in on some of these categories, illustrating how widely inflation rates varied within them. Thus, under NAB, instant coffee had the highest inflation, at 27%, followed closely by Ceylon/black tea, at 26%, while Rooibos tea recorded a much lower rate of 14%. Regarding dairy and eggs, the dominant dairy foods had low inflation (less than 2.5%), but eggs suffered from high inflation – 35% for packs of 18 eggs. Under bread and cereals, rice saw 34% inflation on 1 kg packets, maize meal saw inflation from 5% to 8%, while wheat-based foods had inflation of less than 2.5%.

In m-o-m terms, the food categories and items that experienced the highest inflation were fish (1.4%), NAB (1%), bread and cereals (0.7%), oils and fats (0.5%), sugar and sugar-rich foods (0.4%) and dairy and eggs (0.1%). M-o-m deflation was recorded for meat (-0.4%), fruit (-1.6%) and vegetables (-0.7%).

Those commonly purchased food items with y-o-y inflation in July of 30% or more were (in the BFAP’s order and categorisation) papaya, and eggs. Those with inflation from 20% to just under 30% were rice; instant coffee, and Ceylon/black tea. Those with inflation from 10% to just under 20% were frozen potato chips, sweet potatoes; mutton/lamb offal; condensed milk, whiteners; beetroot; apples, oranges; canned baked beans, dried beans, peanuts, peanut butter; rooibos tea, ground coffee or coffee beans; and brown sugar. Those that recorded deflation last month were white bread, wheat flour; beef (rump steak, mince, fillet, sirloin, stew), pork (ribs, fillet, bacon), mutton/lamb (rib chops, leg, neck, stew); cheddar cheese, fresh cream, sour milk, flavoured milk; sunflower and canola oil; bananas, avocados, pineapple; and, lettuce, cauliflower, broccoli, pumpkin, onions, and mushrooms.

The BFAP’s Thrifty Healthy Food Basket (THFB) would have cost R3 761 in July, which is a y-o-y increase of R366, or 4%, but a m-o-m decrease of R35, or -0.9%. The THFB is composed of a nutritionally-balanced combination of 26 food items from all the food groups and is designed to feed a reference family of two adults, one older and one younger child, for a month. Buying the THFB would have cost a low-income family 30.3% of its total income (which is an improvement over June, when it would have taken 30.6% of their income).

“Inflation on food and [NAB] has moderated significantly through the first half of 2024,” summed up the BFAP. “Considering agricultural commodity price movements, as well as the appreciation in the value of the rand in recent weeks, another expected decline in fuel prices and generally weak consumer demand, food inflation is not expected to increase in the near term.”