South African food inflation in June decelerated to 4.6%, in year-on-year (y-o-y) terms, the Bureau for Food and Agricultural Policy (BFAP) has reported, in its latest 'BFAP Food Inflation Brief'. In month-on-month (m-o-m) terms, June food inflation increased marginally, by 0.5%. (The term “food inflation” includes non-alcoholic beverages [NAB].) In contrast, consumer price index (CPI) headline inflation in June was 5.1% in y-o-y terms, although only 0.1% in m-o-m terms. This was the fourth month in a row in which y-o-y food inflation was lower than CPI headline inflation. 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.

Regarding external factors that had a major effect on the food sector, the BFAP noted that the rand/dollar exchange rate had seen the rand appreciate, in y-o-y terms, by 1.8% in June (from R18.77/$1 in June 2023 to R18.42/$1 in June this year). The rand/dollar exchange rate had been the same in May and June this year. The CPI index for “electricity and other fuels” had been 15.3%, y-o-y, but 0.0%, m-o-m, in June, while that for “fuel” had been 7.6%, y-o-y, but -4.6%, m-o-m. The infrastructure challenges facing the sector were identified as municipal services challenges, port challenges, and water infrastructure.

The food categories which saw the highest y-o-y inflation in June were sugar and sugar-rich foods (10.5%), NAB (8.8%), dairy and eggs (7.3%), bread and cereals (5.2%), vegetables (4.7%), fish (also 4.7%), fruit (4.1%) and meat (0.8%). Oils and fats saw deflation of -1.2%. In m-o-m terms, the highest inflation was experienced by NAB (1.5%), bread and cereals (also 1.5%), dairy and eggs (1.1%), sugar and sugar-rich foods (0.9%), fish (0.8%) and meat (0.1%). Deflation was seen for oils and fats (-0.8%), fruit (-2.2%) and vegetables (-2.9%).

Commonly purchased food items with inflation equal to or greater than 30% were (in the BFAP’s order and categorisation) rice; papaya; Ceylon tea, and coffee. Those with inflation equal to or greater than 20%, but less than 30%, were oranges; drinking chocolate; whiteners, and condensed milk. Those with inflation equal to or greater than 10% but less than 20% were mutton/lamb offal, frozen fish fingers; eggs; margarine; apples, avocados; peanuts, peanut butter, dried beans; tomatoes, frozen vegetables, potatoes, frozen potato chips; white sugar, brown sugar; Rooibos tea, fruit juice concentrates. Those which experienced deflation were white bread, baked goods, pasta; beef (rump steak, T-bone, mince, fillet, stew), pork (chops, bacon), mutton/lamb (rib chop, leg, neck, stew); chicken (whole fresh); cheddar cheese, fresh cream, flavoured milk; sunflower and canola oil; bananas; lettuce, spinach, cauliflower, pumpkin, onions, canned mixed vegetables; sugar-rich foods.

The BFAP’s Thrifty Healthy Food Basket (THFB) would have cost R3 795 in June. This is 4.1%, or R366, higher than in June 2023, but 1.5%, or R56, lower than in May this year. It would have taken 30.6% of the income of a low-income family, in June, which was lower than the proportion in May (31.1%). The THFB is composed of a nutritionally-balanced combination of 26 food items from all the food groups. It is designed to feed a reference family of two adults, one older and one younger child, for a month.