by Wandile Sihlobo | Aug 20, 2025 | Food Security
In yesterday’s letter, I stated my view on South Africa’s food price inflation prospects, signalling a possible moderation. But as the close observers of the data have seen, we have continued to observe a faster rate of increase in South Africa’s consumer food prices.
The data released on August 20 by Statistics South Africa shows that the consumer food price inflation rose to the highest level in 18 months, at 5.5% in July 2025, from 4,7% in June, underpinned primarily by the continuous increases in the meat and vegetables prices.
So, doesn’t this mean we are changing our view about the path ahead? No, we believe the major drivers of these particular products are temporary. Thus, we have maintained our view of potentially moderating food price inflation in the coming months.
As with the previous month, the increase in the meat price inflation was due to two significant factors, which have now somewhat eased.
First, the outbreak of avian influenza in Brazil led to South Africa temporarily restricting the imports of poultry products from Brazil, causing panic in the market. However, the restrictions have now been lifted, and imports are slowly recovering.
Second, South Africa experienced an outbreak of foot-and-mouth disease, which led to concerns about red meat supplies and some panic buying, thus temporarily pushing up prices. The slaughtering has now resumed in the major feedlots, and we continue to believe we may see easing in red meat prices, which should be reflected in the inflation figures of the coming months.
Moreover, when there are outbreaks of disease, South Africa is temporarily restricted from various export markets, which, over time, increases the supply of red meat into the local market.
About vegetables, the price increases are primarily because of the excessive rain’s impact on products, as we have seen volumes of certain products down somewhat in various Fresh Produce Markets in the past couple of months. But the recent data are showing an improvement, which again underscores our view that the recent price inflation acceleration may be temporary.
In essence, while food price inflation accelerated in July, we expect some moderation in the coming months, as the prices of the above products potentially slow, and we see the continuous benefits of an ample domestic grains harvest and a decent fruit harvest that continue to enter the market.
South Africa’s headline CPI was 3.5% in July 2025, from 3.0% in the previous month.
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by Wandile Sihlobo | Aug 19, 2025 | Food Security
We have inflation data for July out later this morning, and I will be looking closely at the food category. Last month, South Africa’s consumer food price inflation rose to the highest level in 16 months, at 4.7% in June 2025, from 4,4% in May, underpinned mainly by the recent increases in the meat, oils and fats, and vegetables prices.
Commenting after the release of these figures, I noted that the acceleration does not alter our assessment of moderate food price inflation in 2025. I still maintain this view, although there are a few items worth monitoring closely, such as meat and vegetables.
In the case of meat, there remains room for potential upside on price inflation, but this will be temporary.
The key factors to consider are that, at the start of the year, consumer demand was improving, and abattoirs capitalised on this improvement by raising prices. This continued for some time.
Moreover, there was panic buying after the announcement of the foot and mouth disease. We also temporarily blocked Brazil’s poultry imports due to an outbreak of avian influenza.
But these fundamentals have shifted. The slaughtering has resumed in some major feedlots that were affected by foot-and-mouth disease. Again, when we have foot and mouth disease, our exports are blocked temporarily, leading to an increase in the domestic meat supply.
In the case of poultry, the ban on Brazil’s poultry imports has been lifted. This is all to say, if we see meat elevated, we will know when the data is out, it may be the tail-end effects of these issues.
In the case of the vegetables, the weather impact affected the supplies a bit in some areas. But if one has been observing volumes in various Fresh Produce Markets, things are normalising well.
Another product that saw an increase in June was oils and fats, primarily linked to increases in the global vegetable market, partly because of the strong global demand for palm oil. We expect the decent local sunflower seed crop to help ease any concerns about supplies in the local market in the coming months.
On the positive side for the consumer, many of the above factors may be temporary. Importantly, we have ample domestic summer grain and oilseeds, and a good fruit harvest, all of which bode well for moderating food price inflation. It is on this basis that last month, I signalled an optimistic view of moderating food price inflation in 2025.
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by Wandile Sihlobo | Jul 30, 2025 | Food Security
South Africa’s consumer food price inflation rose to the highest level in 16 months, at 4.7%, in June 2025, from 4.4% in May, underpinned mainly by recent increases in the price of meat; oils and fats and vegetables. But this increase does not alter our assessment of moderate food price inflation in 2025.
The increase in the meat price inflation was due to two significant factors, which have somewhat eased. First, the outbreak of avian flu in Brazil led to South Africa temporarily restricting imports of poultry products from the country, causing panic in the market. South Africa imports roughly 20% of its annual poultry needs, and Brazil is one of the key suppliers. However, the restrictions have now been lifted and imports are expected to recover in the coming months.
The restrictions were necessary to ascertain the scale of avian flu in Brazil and ensure that it was eradicated before imports could resume. South Africa has received confirmation that Brazil has successfully eradicated the disease and lifted the ban on imports. There will be a lag before we see the impact of improved supplies on prices.
Second, South Africa experienced an outbreak of foot-and-mouth disease, which led to concerns about red meat supplies and some panic buying, temporarily pushing up prices. This was particularly true after the country’s largest feedlot reported an outbreak.
This was followed by a vaccination campaign to limit the spread of the disease. We understand that slaughtering has now resumed in the major feedlots, and we are seeing some easing in red meat prices, which should be reflected in the inflation figures of the coming months.
Moreover, when there are outbreaks of disease, South Africa is temporarily restricted from various export markets, which, over time, increases the supply of red meat to the local market.
This does not mean the foot-and-mouth disease is over in South Africa — far from it. The livestock industry remains in a challenging condition, with increasing costs affecting cattle farmers and feedlots.
One of the interventions South Africa must undertake is the widespread vaccination of cattle against foot-and-mouth disease, as it occurs more frequently. However, this also requires that the country focus on reviving its domestic vaccination manufacturing capability, which was one of the casualties of state capture. Still, for the main point of this article — food inflation — the path ahead looks promising. It is farmers who continue to be under financial strain and are price takers.
Regarding the oils and fats, the local market somewhat mirrors the trades we see globally, and the UN’s Food and Agriculture Organisation’s Vegetable Oil Price Index has remained elevated in recent times due to strong global demand for palm oil. This matters because South Africa imports a sizable amount of palm oil for both food and industrial use. Still, we also have domestic production of some vegetable oils, such as canola and sunflower seed.
We expect the decent local sunflower seed crop to help ease any concerns about supplies in the local market in the coming months.
Overall, we anticipate South Africa’s food price inflation to moderate in the coming months, as the benefits of ample domestic grains and an expected decent fruit harvest continue to enter the market.
We also believe that the worries about meat prices will ease soon as supplies recover. We also view the recent increases in vegetable prices as a temporary blip due to weather issues and expect supplies of various vegetable products to recover significantly in the second half of the year.
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by Wandile Sihlobo | Jul 14, 2025 | Food Security
Brazil is a major producer of coffee, accounting for nearly 40% of global coffee production. Other major producers are Vietnam 17%, Colombia 8%, Indonesia 6% and Ethiopia 6%, amongst others.
Brazil is also a major coffee exporter to the U.S. Consequently, the 50% tariffs that will take effect on August 1 will likely cause Americans headaches. Brazil’s coffee is inescapable due to its significance in global coffee production.
Coffee prices have been relatively high since the start of the year due to unfavourable weather conditions in Vietnam and Brazil, which have weighed on global supplies. The U.S. tariffs will pose a challenge for American consumers.
We are watching the impact of all this on the global coffee prices, which have surged recently on the back of the U.S. tariffs and the preexisting challenges of unfavourable production conditions in South America.
As South Africa, we import coffee, and Brazil can surely have room to increase supplies to South Africa. I know our domestic tea and coffee producers won’t like me saying this. But hey, we have a decent demand for coffee (just like we do with other “substantive beverages” like whiskies, where we spend over US$300 million on imports annually).
Anyways, if one looks at South Africa’s coffee imports by volume, we imported, on average, about 23,921 tonnes per annum in the past five years. Brazil and Vietnam accounted for 54% of South Africa’s coffee imports. Other suppliers of coffee to South Africa include Uganda (8% of SA’s imports), Tanzania (7%), Colombia (4%), Guatemala (4%), Ethiopia (3%), and Honduras (3%).
So, if Brazil can offer competitively priced, high-quality products, it can take a market share from the likes of Vietnam and many African suppliers. The South African consumer is not asking for much – just high quality and a better price.
In these times of export diversification, while South Africa is a small importer, it certainly can take a few more tonnes of coffee imports from Brazil.
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by Wandile Sihlobo | Jun 18, 2025 | Food Security
At a time when avian influenza and foot-and-mouth disease have been in the headlines, it is reasonable for people to closely watch consumer food price inflation to gauge the pass-through of these issues.
On June 18, we had inflation data for May 2025. South Africa’s consumer food price inflation has continued to accelerate; however, this should not be a concern, as the recent upticks are in line with expectations and may be short-lived.
The data released earlier today by Statistics South Africa shows that consumer food price inflation accelerated to 4.4% in May from 3.3% in April 2025.
The acceleration in price inflation of meat, fish, and other seafood, oils and fats, fruit and nuts, and vegetables mainly underpinned the uptick.
Meanwhile, the other products remained roughly unchanged, while others experienced slowing price inflation.
Regarding meat, the key issues that have dominated the headlines are the outbreak of avian influenza in Brazil and its potential impact on domestic poultry supplies and prices. The second concern relates to beef supplies following the outbreak of foot-and-mouth disease.
Still, we believe the effects of these two events have not yet been fully factored into the current price trends. The price increases we observe are essentially a continuation of the past few months, mainly due to base effects, the rising domestic demand, and the suppliers’ window to pass on some costs they have experienced stemming from higher feed prices over the past couple of months before the recent cooling of maize and soybean prices.
In the case of beef, it is essential to note that, unlike what is generally stated in the commentary, when an outbreak occurs, red meat exports are temporarily banned, which increases local supplies.
In the past, this led to a mild decline in red meat prices. This is why we have doubts about the talk of potential sharp increases in red meat prices in the coming months due to the outbreak of foot-and-mouth disease.
Regarding poultry, South Africa has temporarily restricted imports from Brazil, one of its largest suppliers of poultry products, due to an outbreak of avian influenza there.
However, this ban is for the short term, and the authorities have indicated that South Africa will restrict imports only in the affected areas, not the entire country of Brazil. This means that any poultry supply issue, if it arises, will be temporary.
Based on these two factors, we are inclined to believe that the recent uptick in meat inflation may prove to be short-lived.
Regarding fruits and vegetables, we observe a recovery in the supply of various products in the fresh produce markets and suspect that prices may moderate in the coming months. The recent increases reflect the disruptions in supplies that have occurred in recent months, some of which are related to weather issues.
Similarly, oil and fat prices may soften in the coming months as we are starting to see this trend internationally, and we are an importer of a range of vegetable oils. For example, the FAO Vegetable Oil Price Index averaged 152.2 points in May, 4% lower than in April. Lower prices of palm, rapeseed, soy, and sunflower oils drove this.
On a positive note, we see a moderation in grain-related product prices, which reflects the better harvest in the 2024-25 season domestically, as well as the better rice, wheat, and maize harvest globally. We expect this current moderation to continue in the coming months.
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by Wandile Sihlobo | May 21, 2025 | Food Security
Food prices have been in the headlines globally, but in South Africa, the situation is clear; we are food secure at the national level, but struggle with food insecurity at the household level. The primary challenge in our assessment is income poverty, not the lack of availability or expensive products. But that is not what I want to explore further now (you can read more here).
I want to comment briefly on consumer food price inflation data. However, one clarification is essential before we do so: we must never forget that relatively lower inflation does not equate to lower prices. Inflation is the pace of price increases.
Now that we have that out of the way, the data released today by Statistics South Africa shows that consumer food price inflation accelerated to 3.3% in April from 2.2% in the previous month.
This increase was underpinned by the rise in price inflation of most food basket products, most notably cereal products, meat, oils and fats, and vegetables. This is unsurprising and reflects the pass-through of the higher agricultural commodity prices we observed at the end of last year and into the start of 2025, particularly with grains.
In the case of meat, price increases are expected as a response to the slight recovery in consumer demand, which we have been highlighting over recent months. In the case of vegetables, we see the increases as a reflection of disruptions in field work caused by the excessive rains in recent weeks, which should be a temporary blip.
Looking ahead, we suspect that the current mild quickening of food price inflation will prevail for much of the year’s second and third quarters as the increases in the farm level of some of the key products, such as grains, continue to pass through to the retail level.
While grain prices have softened recently, they were elevated for much of the last quarter of 2024 and into the start of this year because of the tight maize stocks. There is generally a lag of three to five months before the increases at the farmgate begin to show at retail levels.
Thus, while grain prices have now softened in anticipation of an ample harvest in the 2024-25 season, we will continue to see a different price direction in the food inflation basket for months. Still, we don’t anticipate that the increases will be as sharp as the wheat and rice prices, which are other key cereals that have generally seen prices softening in the past few months.
Regarding vegetables, the recent price increases partly reflect some regions’ challenges with harvesting because of extra wet conditions. As such, we expect the prices to normalize in the coming months. Importantly, vegetables and fruits don’t have a longer price lag than grains.
In the case of meat products, the price direction may soon change because of the potential increase in domestic supplies. A foot-and-mouth disease outbreak is temporarily closing some key export markets and likely raising domestic red meat supplies.
The counter factor to this possible moderating trend could be poultry prices. South Africa imports roughly 20% of its annual poultry consumption, and over two-thirds of imports from Brazil. There is now an outbreak of avian flu in Brazil, which could limit their poultry exports.
Under such a scenario, the key determinant will be whether South Africa can boost domestic supplies or source additional imports from other regions. We suspect this may have slight upside pressures. Still, we think meat price inflation may be sideways to slowing.
South Africa’s headline CPI was 2,8% in April 2025, down from 2,7% in March.
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by Wandile Sihlobo | Feb 26, 2025 | Food Security
Statistics South Africa has just completed one of its regular reweighting and updating of the Consumer Price Index (CPI). The basket component I watch closely –food – now has a higher weighting of 16,84 (from 15,30 out of 100,00).
Notably, the reweighting of the CPI basket has not shifted the trend of moderating food price inflation we have been observing in recent months.
Statistics South Africa recently released data showing that consumer food price inflation slowed to 1.5% in January 2025 from 1.7% in December 2024.
An important clarification is necessary here: we must remember that lower food inflation does not equate to lower prices. Inflation is the pace of price increases. So, while that pace has slowed to 1.5% in January 2025, some food item prices are still rising.
Now, back to the data: This deceleration was underpinned by most products in the food basket, particularly “meat,” “fish and other seafood,” “milk, other dairy and eggs,” and “fruit and nuts.”
Essentially, the base effects and the recovery in supplies of various products continue to be the primary drivers of the slowing rate of food price increases.
At the start of 2024, the challenges of lower vegetable supplies following the impact of load-shedding on irrigation the previous year and the tail-end effects of avian influenza on poultry were the topical issues underpinning food price inflation. We are far from that scenario now, and supplies have recovered.
The outlook for 2025 remains promising that consumer food price inflation could be relatively comfortable.
The recent rains across South Africa have benefitted agricultural production, and farmers planted a decent area of crops. For example, the preliminary plantings data released by the Crop Estimates Committee last month showed that South African farmers likely planted 4,45 million hectares of summer grains and oilseeds in the 2024-25 season, up mildly by 0,3% from the previous season.
We see similar and better production conditions for fruits and vegetables.
That said, for the first half of 2025, grain-related products remain the upside risk to consumer inflation following a surge in white maize prices in recent months due to the poor crop harvest caused by the drought.
Moreover, we suspect that poultry products and other red meat prices could increase moderately in the coming months because of higher feed costs, mainly soybeans and yellow maize prices, which are elevated as the country awaits a new crop season.
Still, these product price increases are unlikely to be notable as the consumer is also broadly under pressure, and the demand may still be relatively weak.
The headline CPI was 3,2% in January 2025, up from 3,0% in December 2024.
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by Wandile Sihlobo | Feb 12, 2025 | Food Security
I noticed some headlines about “falling world food prices” and thought I should comment. These articles do not necessarily refer to “retail food prices”; they are primarily about agricultural commodity prices, measured in the FAO’s “global food price index.”
So why do I care about all of this? I care because when people read about “falling global food prices” and do not see them at their local retailers, they start thinking someone is taking chances and blame retailers.
So, we must stress that these are global agricultural commodity prices. These commodities must first be processed and distributed, among other things, which adds costs.
Also, we don’t all shop at one big global retail, so things differ from country to country, region by region, and so on.
So this is what happened — last week, the FAO released its global Food Price Index, a measure of the monthly change in international prices of a basket of food commodities, for January 2025.
The index was at 125 points, down 2% from the previous month and 22% below its peak in March 2022. This peak occurred after Russia invaded Ukraine, and there was heightened uncertainty in the grain markets.
The mild monthly easing in prices was not widespread but only in a few commodities: sugar, vegetable oils, and meat. This is broadly due to slowing demand after the festive season and promising production prospects for vegetable oils.
For fellow South Africans, we must continuously monitor these global developments as we are interlinked to the world agricultural markets.
However, our key import commodities are wheat, rice, and some vegetable oils. Due to ample supplies, the prices of these commodities are moderating, which benefits importers like South Africa. This is a welcome development and bodes well with the generally moderate food price inflation in South Africa.
As a reminder, South Africa ended 2024 with lower consumer food price inflation, at 1,7% in December 2024.
Again, this broad post isn’t about inflation per se, but an emphasis that this “global food price” story mainly refers to agricultural commodity prices, which have a leg before they show at the retail level.
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