Food inflation in South Africa continues to accelerate, the Bureau for Food and Agricultural Policy (BFAP) has reported.
In its ‘Food Inflation Brief’ released in late March, it notes that, in February, South African food prices rose 0.9% in month-on-month terms and by 6.4% in year-on-year terms. In January, food inflation had been 5.7% year-on-year. In February, food inflation had contributed 1.1 percentage points to the consumer price index headline inflation figure of 5.7%.
International factors are playing a significant role in driving food inflation, which is a global phenomenon. These factors include increasing energy prices, disruptions of supply chains, and adverse weather, augmented by the effects of the Russia-Ukraine war. These are reducing supply and increasing input costs worldwide.
“In February 2022, the [United Nations Food and Agriculture Organisation] Food Price Index, a measure of underlying agricultural commodity prices, increased by 3.9% from January 2022 (month-on-month) and by 20.7% from February 2021 (year-on-year),” highlighted the BFAP. “This represents a new all-time high, surpassing the levels last reached in February 2011. All commodity subindices increased, with the most significant being observed in the vegetable oil (+8.5% month-on-month) and dairy (+6.4% month-on-month) price subindices.”
South Africa, however, is not the worst affected market in the world. This country’s 6.4% year-on-year food price inflation is exceeded by the rates for the US (7.9%), Kenya (8.7%), Brazil (9.1%) and Zambia (16%). This is because the prospects for the South African summer crop harvest are good, the BFAP explains, with the consequence that food prices have remained close to export parity prices. Further, constraints on the spending power of South African consumers have reduced market demand.
In terms of the food categories in the South African market, those that recorded the highest year-on-year inflation in February were oils and fats (22.7%), meat (8.6%), vegetables (7.7%), fish (5.3%), milk, cheese and eggs (4.7%), bread and cereals (3.7%), nonalcoholic beverages (2.8%), and sugar and sugar-rich foods (1.8%). Fruits actually recorded deflation of 1.6%. In month-on-month terms, bread and cereals saw the highest inflation, of 2.4%, followed by fish (2.3%), nonalcoholic beverages (1.9%), fruit (1.8%), oils and fats (1.4%), while the milk, cheese and eggs and vegetables categories both recorded 0.1%. Meat saw no inflation at all month-on-month, while sugar and sugar-rich foods experienced deflation of 0.6%.
Individual and commonly bought food items which recorded year-on-year inflation that exceeded 10% in February were, in the order given by the BFAP, vegetables (pumpkin, tomatoes, cabbage, spinach), beef (offal, brisket), mutton/lamb neck, chicken (giblets, individually quick-frozen [IQF] and non-IQF portions), oil products (margarine, sunflower oil, including canola oil), frozen hake, beverages (Ceylon and other black tea, instant coffee), cake flour, tinned mixed vegetables, whiteners, and bacon. Food items that experienced inflation of 6% to 10% were (again in the BFAP’s order) beef (T-bone), tinned baked beans, macaroni, eggs, polony, fish (canned pilchards, fish fingers), fresh low-fat milk, vegetables (cucumber, beetroot, onions, broccoli), beverages (fruit juice) and fresh whole chicken.
The price of the BFAP’s ‘thrifty healthy food basket’ (THFB) jumped 4% in February, in month-on-month terms (in money terms, by R120), and by 7.4% (or R352) in year-on-year terms. The nutritionally balanced THFB is composed of 26 food items from all food groups, and is designed to feed a family composed of an adult man, an adult woman and two children (of different ages).