- In October, the food and NAB inflation in South Africa kept rising.
- The inflation rate was 8.7% year over year and 1.5% month over month.
- Increased production costs due to uncontrollable factors are causing more volatility in the volumes offered to the market.
In October, the Bureau for Food and Agricultural Policy (BFAP) reported that food and non-alcoholic beverage (NAB) inflation in South Africa kept rising. As opposed to the CPI headline inflation figures of 5.9% and 0.9%, the inflation rate was 8.7% year over year and 1.5% month over month.
For the CPI headline inflation figure, food inflation added 1.6 percentage points year over year and 0.3 percentage points month over month.
Food inflation
Bread and cereals, veggies, dairy products, meat, NAB, and sugar-rich foods were the main causes of inflation for food and NAB. Prices for food commodities around the world decreased by 10.9% from September to October and by just 0.5% from that month in 2022.
In South Africa, last month’s y-on-y inflation was highest for vegetables (17.6%), then sugar-rich foods (17.6%), dairy and eggs (12.4%), bread and cereals (8.8%), fruit (8.5%), NAB (8.4%), fish (7.7%), and meat (3.4%).
Potatoes, sweet potatoes, broccoli, cauliflower, papaya, and bananas were common food items purchased that had y-on-y inflation equal to or higher than 30%. Items that experienced year-over-year inflation ranging from 20% to slightly less than 30% included rice, instant noodles, frozen potato chips, polony, onions, pumpkin, sugar, tea, whiteners, and soup powder.
October saw a 5.1% decline in the rand’s value relative to the US dollar and an 11.2% year-over-year and 6.5% month-over-month increase in the South African CPI rate for fuel. Thrifty Healthy Food Basket (THFB) costs increased by 1.9% month over month and 8.4% year over year at the BFAP.
Increased production costs due to uncontrollable factors are causing more volatility in the volumes offered to the market. A depreciating rand, which impacts the price of imported inputs like fuel and fertilizer, and ongoing load-shedding pressure continue to be significant contributors to increased input costs, impacting farmers’ business and production choices and raising costs along the value chain.
