South African food and non-alcoholic beverage (NAB) inflation continued to decelerate in June, in year-on-year (y-o-y) terms, the Bureau for Food and Agricultural Policy has highlighted. Statistics South Africa data showed that it slowed from 1.9% in May to 1.6% in June. This was in contrast to consumer price index (CPI) headline inflation, which accelerated from 4.5%, y-o-y, in May, to 5% in June. However, food and NAB inflation did jump in month-on-month (m-o-m) terms, from 0.1% in May to 0.4% in June. 

The food category that had the highest y-o-y inflation in June was meat, at 5.1%. However, meat inflation has been steadily declining since January, when it stood at 13.5%. Within the meat category, the highest y-o-y inflation in June was experienced by pork (chops, fillet, ham, bacon and ribs), with a range between 5.3% and 15%; beef (offal, at 12.7%, and fillet, at 5.3%); mutton/lamb (offal, leg, stew, neck, chops, ranging from 6.7% to 10.7%); and chicken (7.4% for non-individually quick frozen (non-IQF) portions and 6.2% for IQF portions). Other meat products with high y-o-y inflation were boerewors (9.2%), viennas (8.3%) and polony (7.4%). 

The category with the second highest y-o-y inflation in June was NAB, at 5%. The highest levels were recorded for Ceylon or black tea (8.4%), rooibos tea (7.9%) and the smaller pack sizes of carbonated drinks (also 7.9%).  

Several other food categories also experienced y-o-y inflation in June. They were fish and seafood (4.8%), sugar and sugar-rich foods (2.5%), oils and fats (2.3%) and dairy and eggs (1.6%). 

However, a number of food categories recorded significant y-o-y deflation in June. These were cereal products (-1.5%), vegetables (-3.5%), and fruits and nuts (-10%). Popular foods such as apples, bananas, dried beans, eggs, maize meal, potatoes and rice also recorded deflation. 

In m-o-m terms, however, inflation on vegetables increased by 2.7%, while rises were also experienced by fish and seafood (1.8%), dairy and eggs (1%) and oils and fats (0.6%). 

The cost of the BFAP’s Thrifty Healthy Food Basket (THFB) in June increased by only 0.04%, or by R1.49, y-o-y, but by 0.7%, or R30, m-o-m. The THFB is composed of a nutritionally-balanced combination of 26 food items from all food categories and is designed to feed a reference family of two adults and two children for a month. Assuming such a family earns two minimum wages and two child support grants, the THFB will have consumed 30% of its income. This is in line with the average food expenditure share (30.4%) of the less affluent 50% of South African households. (If the reference family earned only one minimum wage, plus the child support grants, then the THFB would have required 55.2% of their income.) 

The BFAP has also developed an Adequate Energy (AE) food basket, which provides only sufficient calories for the reference family, without dietary diversity. Again assuming the family earned two minimum wages and two child support grants, the AE would have taken 9.5% of their total income. If the family earned only one minimum wage plus the child support grants, the AE would have consumed 17.4% of their income. 

“Food commodity prices are expected to remain relatively moderate in the coming months,” reported the BFAP. “Meat prices are likely to continue trending lower as vaccination efforts against animal diseases (mainly [foot-and-mouth disease] and bird flu) continue to progress. In addition, ample summer crop supplies are expected to support further price easing while reducing feed costs and boosting livestock production.” 

There are, however, downside risks. These include increasing costs of fuel and fertiliser, which could be worsened by conflict in the Middle East, and the expected El Niño weather cycle, which could reduce crop plantings and harvests going into 2027. Some of these potential price rises could be cushioned by the large reserves created over the past two bumper seasons.