Food inflation in South Africa rose sharply in May, in both year-on-year (y-o-y) and month-on-month (m-o-m) terms, the Bureau for Food and Agricultural Policy (BFAP) has reported in its latest Food Inflation Brief. In y-o-y terms, food and non-alcoholic beverage prices last month were up 7.6%. In April, the y-o-y inflation figure had been 6%. In m-o-m terms, the increase in inflation in May had been 2.1%.
Although the United Nations Food and Agriculture Organisation had reported that global overall food price inflation declined by 0.6% in May, following a previous 0.6% decline in April, from its record high level in March, this decline had largely been the result of falls in the vegetable oil, dairy and sugar categories. Global cereal prices increased by 27.6% y-o-y and 2.2% m-o-m in May, while global meat price inflation that same month had been 11.7% y-o-y and 0.5% m-o-m.
“The main contributor to the rising cereal price index was wheat prices, driven by India’s wheat export ban, production condition uncertainties and the ongoing war which has markedly reduced production and export prospects in Ukraine,” explained the BFAP. “The main contributor to the rising meat price index was poultry meat, driven by continued supply chain disruptions in Ukraine, avian influenza outbreaks and high demand in Europe and the Middle East.”
In South Africa, the food categories which suffered the highest y-o-y inflation last month were – oils and fats (26.9%), meat (9.4%), bread and cereals (8.4%), fish (6.2%), non-alcoholic beverages (4.9%), sugar and sugar-rich foods (4%), milk and cheese and eggs (3.8%), vegetables (3.5%) and fruit (2.1%). In m-o-m terms, they were – oils and fats (10.1%), bread and cereals (3.4%), meat (1.9%), vegetables (also 1.9%), milk and cheese and eggs (1.8%), fish (1.2%), sugar and sugar-rich foods (1.1%) and non-alcoholic beverages (0.9%), while fruit registered m-o-m deflation of 1.3%.
The food items which registered above 10% y-o-y inflation last month were, in the order and categorisations given by the BFAP, maize-based foods (super maize meal), wheat-based foods (cake flour, bread flour, white bread, various baked goods, instant noodles), mutton/lamb (neck), beef (rump steak, chuck, brisket), pork (ham), polony, fish (frozen hake), fats and oils (vegetable oil, margarine, mayonnaise), dairy (cheddar cheese, powdered milk), vegetables (avocados, broccoli, cauliflower, mixed tinned vegetables, spinach, cucumber, lettuce), legumes (dried beans, tinned baked beans, peanuts), non-alcoholic beverages (coffee, fruit juice) and “other” (coffee and tea whiteners). The food items which recorded inflation between 6% and 10% in May were (again in the order and categorisations given by the BFAP) wheat-based foods (brown bread), breakfast cereals, mutton/lamb (offal, rib chops), beef (sirloin, fillet, stewing, mince, T-bone), pork (bacon, ribs), chicken portions (frozen but not individually quick frozen), fish (canned pilchards, frozen fish fingers) dairy (sour milk), vegetables (peppers), fruit (pineapples, oranges) and granular sugar (white sugar, brown sugar).
The price of the BFAP’s Thrifty Healthy Food Basket (THFB) increased last month by 5.5% (or R164) in y-o-y terms, and by 2.4% (or R74) in m-o-m terms. The THFB is composed of 26 nutritionally-balanced food items from all food groups and is designed to feed a family of two adults and two children (one older, one younger) for a month. Assuming a family earning two minimum wages, plus child grants and school feeding, the THFB would last month have absorbed 30.2% of their income. The BFAP highlighted that econometric analysis showed that the cost of the THFB increased by some 0.53% with every 1% increase in the diesel fuel price.