Food and non-alcoholic beverage (NAB) inflation (hereafter to be referred to simply as food inflation) in South Africa continued to decelerate in August, in year-on-year (y-o-y) terms, the Bureau for Food and Agricultural Policy (BFAP) has reported, in its latest Food Inflation Brief.  Y-o-y food inflation was 8% in August, which was 1.9 percentage points lower than the equivalent figure for July, which had been 9.9%. Month-on-month (m-o-m) food inflation in August actually ran at zero percent.

This was the fifth consecutive month in which the country’s y-o-y food inflation rates had declined. The figure for August was in line with the rates last recorded between May and June last year; thereafter, there had been 11 consecutive months of sustained increases in food inflation.

Although food inflation was noticeably higher than consumer price index (CPI) headline inflation in August, this gap was much narrower than in the preceding months and continued a narrowing trend. In August, this gap had come to 3.2 percentage points; at its peak, in March this year, y-o-y food inflation had been running 7.1 percentage points higher than CPI headline inflation.

In August, the food categories which had recorded the highest y-o-y inflation were sugar-rich foods (18.5%), vegetables (16.6%), dairy and eggs (11.9%), bread and cereals (9.9%), fish (8.3%), NAB (7%), meat (3.6%) and fruit (3.5%). Oils and fats recorded deflation of 13.6%. The food categories which experienced the highest m-o-m inflation in August were fruit (1.6%), sugar-rich foods (1%), vegetables (0.7%), NAB (0.5%), bread and cereals (0.2%), fish (also 0.2%) and oils and fats (again, 0.2%). Meat registered m-o-m deflation of 0.7%.

Food items which saw y-o-y inflation of 30% or higher in August were (in the order given by the BFAP) onions, broccoli, cauliflower, potatoes, sweet potatoes, and brown sugar. The food items which saw inflation of less than 30%, but equal to or higher than 20%, were instant noodles, frozen potato chips, white sugar, and mageu (a traditional indigenous NAB). Those items with inflation less than 20%, but equal to or higher than 10%, were maize meal, corned beef, bacon, ham, mutton/lamb offal, pork fillet, fresh chicken portions, polony, frozen hake, fish fingers, peanuts, canned baked beans, pears, bananas, papaya, apples, cabbage, carrots, spinach, pumpkin, milk, cheese, yoghurt, sugar-rich foods, Ceylon tea, fruit juice, instant coffee, vinegar, baking powder, tomato sauce, soup powder, and whiteners.

Food items which recorded y-o-y deflation in August were canned mixed vegetables, tomatoes, beetroot, pineapple, oranges, avocados, rice, beef (sirloin, brisket, chuck, offal, T-bone, stew, rump, fillet), mutton/lamb (chops, neck, leg, stew), pork (chops), eggs and fresh cream, and plant oils.

The cost of the BFAP Thrifty Healthy Food Basket (THFB) increased by 7.8%, or R344, y-o-y, in August. But in m-o-m terms, its price decreased by 0.8%, or R28. The THFB is composed of 26 nutrionally balanced food items from all the food groups, and is designed to feed a reference family of two adults, one older and one younger child, for a month. Assuming the family was earning two minimum wages and was benefitting from child grants and school meals, in August buying the THFB would have consumed 30.7% of their total income.