by Wandile Sihlobo | Aug 27, 2024 | Food Security
After a prolonged period of much higher food price inflation, the recent data paint a welcome picture of notable easing. South Africa’s consumer food price inflation slowed to 3.9% in July 2024, from 4.1% in the previous month. This is the lowest level since January 2020 and was underpinned by the continued moderation in price inflation across most products in the food baskets, except for bread and cereals and meat.
South Africa’s food price inflation — the rate at which food prices increase — has been moderating since the start of the year. But in recent months, I feared that the rise in the prices of bread and cereals and meat products would change the direction of food inflation to a slight uptick.
Positively, they have been fairly outweighed by the continued moderation of other products. The slowing price inflation in products such as oils and fats, milk, eggs and cheese, fruit, and vegetables is a result of increased supplies and, to an extent, the stronger rand to the dollar helps in the case of imported vegetable oils.
With that said, I continue to monitor the prices of bread and cereals, and I believe the prices may increase in the coming months. The challenge arises from the mid-summer drought that led to a 19% year-on-year decline in maize production to an expected 13.34 million tonnes. White maize production is forecast at 6.35 million tonnes (down 26% year-on-year), and yellow maize at 6.99 million tonnes (down 12% year-on-year). Given the scale of the decline in the white maize harvest and the expected strong demand from Southern Africa, I expect white maize prices to remain reasonably elevated for some time and thus sustain the increases in bread and cereal products in the food basket.
But I do not expect the potential price increase to be substantial as the forecasts from the International Grains Council signal the possible ample harvest in the world. For example, the 2024-24 global wheat and rice production are estimated at 799 million tonnes (up 0.6% year-on-year) and 528 million tonnes (up 1.2% year-on-year), respectively.
South Africa imports nearly half of its annual wheat consumption, about 1.5 million tonnes yearly. Additionally, South Africa imports about a million tonnes of rice each year. Favourable global production conditions of these grains in the 2024-25 season and the possible subsequent price softening would be welcome developments in an importing country like ours. Moreover, the relatively firmer domestic currency will also help ease the costs of imported foods. This is a benefit for these grains and imported vegetable oils such as palm oil.
Beyond these grains, the meat price increases could remain mild in the coming months. The weak consumer demand remains a problem, particularly for red meat, and this could keep meat prices in check.
Because of bread and cereals and meats’ more significant weightings in the food basket, their price increases, if sustained, may change the direction of the headline food price inflation from moderation to a mild uptick in the coming months. Still, this should remain at relatively comfortable levels, not the major increases we saw last year.
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by Wandile Sihlobo | Jun 19, 2024 | Food Security
We continue to observe a welcome easing in South Africa’s consumer food inflation. The data released this morning by Statistics South Africa shows that consumer food inflation slowed to 4,3% in May 2024, down from 4.4% in the previous month.
This deceleration was primarily driven by price moderations in “bread and cereals”, “milk, eggs and cheese”, “oils and fats”, and “sugar, sweets and desserts”. Meanwhile, other products in the food basket experienced a mildly increase.
However, in the coming months, we may start to see a slight change in the direction of consumer food price inflation, with potentially a slight uptick as the price increases of the past few months in the grain-related food products begin to filter through to the consumer.
The mid-summer drought in South Africa resulted in a 25% decline in white maize harvest to an estimated 6,4 million tonnes. This led to a surge in white maize prices from the end of the first quarter to the second quarter.
However, these price increases have not been fully reflected in grain-related food products, partly due to the lag between farm gate prices and retail prices.
Despite this, we doubt if the increases will be sharper. The moderate wheat prices, supported by ample global supplies and a relatively firmer domestic currency, will somewhat mitigate the sharper price increase in this food category.
Beyond the grain-related food products, “meat”, “fish”, “fruit”, and “vegetable” prices may continue to show a slight uptick in the coming months.
These price movements and our expectations of the price changes in grain-related food products may be sufficient to slightly nudge up the food inflation trend from the moderating trend we have observed in the past few months, even if ever more slightly.
Globally, the FAO Food Price Index also shows a slight uptick monthly, mainly underpinned by increases in grains and dairy products.
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by Wandile Sihlobo | May 27, 2024 | Food Security
The pace of an increase in South Africa’s consumer food prices continues to slow. This is a welcome development as we spent the past few months worried about the faster pace of food prices.
The recent data from Statistics South Africa shows that South Africa’s consumer food inflation slowed to 4,4% year-on-year in April 2024 (from 4,9% in the previous month).
This moderation in inflation was underpinned by the deceleration across most food products, except for “fruit and vegetables”, which lifted mildly from the last month. The uptick in fruit and vegetables is mainly due to base effects, but these increases should remain mild as supplies of most products are abundant.
A closer look at other major food products in the food basket shows the moderation in meat prices. This reflects an improvement in meat supplies after some constraints at the end of 2023 because of avian influenza. There is now anecdotal evidence that the restocking process is underway, and there is improvement in poultry product supplies nationwide.
Moreover, the prices of rice and vegetable oils have continued to moderate due to increased global supplies, and South Africa is a significant importer of these products.
The wheat prices are also relatively lower than last year, although we have seen a price rally recently.
Global agricultural production
At the end of last year, when India, a significant role player in global rice production and exports, limited its exports, there were concerns about a long-lasting price increase. Indeed, in the months towards the end of 2023, global rice prices rallied, causing food security concerns.
But we now see some moderation, which reflects the reasonably higher supplies in various major rice producers, and that supply changes have adjusted somewhat since India’s decisions.
The prospects for the new season are also comforting. The United States Department of Agriculture estimates the 2024/25 global rice production at 527 million tonnes, up 2% from the previous season. This is on the back of the expected large crop in Asia.
In the case of what, the supplies globally remain plentiful, and the new season is promising. For example, the United States Department of Agriculture forecasts the 2024/25 global wheat harvest to be 798 million tonnes, up 1% from the previous season. The bigger harvests are expected in Canada, Australia, the US, Kazakhstan, and China.
Regarding global vegetable oil supplies, the United States Department of Agriculture forecasts the 2024/25 global soybean harvest at 422 million tonnes, up 6% year-on-year. This improvement is due to the expected large harvest in Brazil, Argentina and the US.
The global sunflower seed production is also at 57 million tonnes, roughly unchanged from the 2023/24 season.
Domestic currency moves are vital for food imports
Still, the exchange rate will also matter much in the months ahead, as South Africa imports ample wheat, rice, and palm oil.
Concluding view
Overall, there remains increased uncertainty about South Africa’s consumer food inflation path for 2024, with some upside risks in various products.
Still, the underlying factors are not all one-sided, and one has to reflect on the price movements and weighting of multiple products when considering their food price forecast.
Our primary concern remains the grains-related products in the food basket because of the domestic poor white maize harvest and the potential upside pressure on prices. South Africa’s white maize harvest is down 25%, estimated at 6,4 million tonnes in the 2023/24 season. The risks of other food products are less pronounced, and recent price developments reflect this view.
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by Wandile Sihlobo | Apr 28, 2024 | Food Security
Food inflation remains a topical issue in South Africa. The drought in some regions of the country has raised fears of a potential upside in food prices.
Fortunately, the available data continues to paint a better picture of the food price conditions. For example, the recent data from Statistics South Africa shows that the country’s consumer food inflation decelerated to 4,9% in March 2024 (from 6,0% in the previous month).
This is the lowest level since September 2020 and was underpinned by the deceleration across most food products, except for “fish”, which lifted mildly from the previous month. While it has been quite dry across the country, vegetable and fruit production has not taken a significant strain because all commercial production in South Africa is under irrigation, and load-shedding has been mild.
Moreover, meat prices rose at the end of 2023 due to supply constraints of poultry products on the back of avian influenza. But there is now anecdotal evidence that the restocking process is underway and there is improvement in the poultry products supplies. Therefore, the risks of further price increases have subsided somewhat.
The prices of wheat, rice, and vegetable oils have moderated due to increased global supplies, and South Africa is a significant importer of these products.
Risks
Still, I think this broad moderation path will continue for some food basket products only for the next few months. I see significant upside risks for the “bread and cereal products” in the food basket. This is because of the potentially poor white maize harvest from the recent heatwave and dryness.
There are notable crop failures in South Africa’s western regions, primarily white maize-producing regions (We see similar challenges in some yellow maize, other grains and oilseed regions).
At the end of March, the estimates from the Crop Estimates Committee placed South Africa’s 2023/24 white maize harvest at 6,3 million tonnes, down 25% year-on-year. This has led to a surge in white maize prices.
On April 15, the South African white maize spot price was up 36% year-on-year, trading at R5 450 per tonne. In addition, the higher demand for white maize in the broader Southern African region due to crop failure also adds to the price increases.
Over the coming months, part of the maize price increase will reflect on the “bread and cereal products” of the inflation basket.
Global developments
Aside from the domestic white maize supply challenges, there is ample wheat, rice, and vegetable oils supply on the world market. The International Grains Council forecasts the 2023/24 global wheat harvest at 789 million tonnes, well above the long-term average.
There is a lot of rice globally, with the 2023/24 global harvest forecast at 511 million tonnes, well above the long-term average. The 2023/24 global sunflower seed harvest is forecast at 57,9 million tonnes, well above average.
The stocks of these commodities are at comfortable levels; thus, the international grain prices have continued to moderate. For example, the Food and Agriculture Organization of the United Nations (FAO) ‘s Food Price Index, which measures the monthly change in international prices of agricultural commodities, averaged 118.3 points in March 2024, down 8% from last year’s corresponding period. The broad decline in grains and oilseed prices underpinned this moderation, again underscoring the importance of improved supplies in the 2023/24 season.
While early, the outlook for the 2024/25 season starting this month in the northern hemisphere is encouraging. The favourable production conditions in the 2024/25 season add to the continuous moderation of the grains and oilseed prices for the consumer’s benefit.
The exchange rate will also matter much, as South Africa imports roughly half of its annual wheat and rice consumption.
Outlook
Overall, the recent food inflation data release is a welcome development. Still, there is increased uncertainty about South Africa’s consumer food inflation path for 2024, with some upside risks in various products. The underlying factors are not all one-sided, and one has to reflect on the price movements and weighting of multiple products when considering their food price forecast.
Indeed, the outlook for vegetables and fruit remains optimistic. The recent drought did not significantly impact as South Africa produces all of the fruit and vegetables under irrigation. Our observations of the meat and eggs food component are also encouraging, as we see improvement in supplies and suspect there will be moderation in prices.
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by Wandile Sihlobo | Apr 3, 2024 | Food Security
Since the reports of El Niño-induced drought and crop losses emerged, there has been rising concerns about a potential surge in South Africa’s consumer food price inflation. This will be after months of moderation (at 6,0% in February 2024).
There have also been calls for the government to intervene and cushion households from potential food price surges. It remains unclear, however, if such assistance should be through policy instruments or household support in a form of food packages for the indigent.
There may even be a temptation to ask whether the government should limit agricultural commodity exports or policy options for price interventions. Such suggestions, while sympathetic to households, would be policy mistakes.
The appropriate policy action for the South African government should be a dose of do‐nothingism. Any intervention would potentially have negative unintended consequences in the next production season and leave the country with long-term food security issues.
We should also appreciate that the current drought will likely not result in a broad increase in food products. The risks currently lie in white maize. There are notable crop failures in the western regions of South Africa, which are primarily white maize-producing regions. It is unclear what the white maize harvest will be as the weather conditions remain challenging. At the end of March, the estimates from the Crop Estimates Committee placed South Africa’s 2023/24 white maize harvest at 6,3 million tonnes, down 25% year-on-year. This will still be sufficient to meet the domestic needs if it materializes.
While some may argue that ample maize supplies in the global market could cushion South Africa, the challenge with white maize is that it is not as widely traded. The bulk of global maize supplies is yellow maize. Indeed, there is a lot of maize in the world, with the International Grains Council (IGC) forecasting the 2023/24 global maize harvest at 1,2 billion tonnes, up 6% year-on-year. However, this will primarily be yellow maize, and the demand for white maize will likely increase.
In addition, the demand for white maize will be a South African challenge and a Southern African regional challenge. Therefore, there could be a disconnect between the domestic white maize prices and the general global maize prices, which are likely to continue softening due to improved supplies. For example, a large spread exists between South Africa’s futures prices of yellow and white maize following reports of bad crop conditions. South Africa’s white maize spot price is trading around R5 200 per tonne, while yellow maize is hovering at R4 200 per tonne. This signifies the challenge with white maize supplies.
The products that play favourably for South Africa are wheat and rice, which South Africa remains a significant importer of. There are ample supplies of these products in the global market. The IGC forecasts the 2023/24 global wheat harvest at 789 million tonnes, well above the long-term average. There is a lot of rice globally, with the 2023/24 global harvest forecast at 511 million tonnes, well above the long-term average.
The stocks of these commodities are at comfortable levels; thus, the international grain prices have continued to moderate. For example, the Food and Agriculture Organization of the United Nations (FAO)’s Food Price Index, which measures the monthly change in international prices of agricultural commodities, averaged 117.3 points in February 2024, down 1% from its revised January level and 11% from last year’s corresponding period. The broad decline in grains and oilseed prices underpinned this moderation, again underscoring the importance of improved supplies in the 2023/24 season.
The exchange rate will also matter much, as South Africa imports roughly half of its annual wheat and rice consumption.
Another major factor driving South Africa’s food inflation this past year was the increase in prices of vegetable and poultry products. The poor harvest caused the vegetable price increases after load-shedding at the start of the year, undermining crop quality. Things have changed this year. While it has been quite dry across the country since the beginning of February 2024, vegetable production has not taken a strain because all commercial production in South Africa is under irrigation, and load-shedding has not been intense.
Moreover, meat prices rose at the end of 2023 due to supply constraints of poultry products on the back of avian influenza. But there is now anecdotal evidence that the restocking process is underway and there is improvement in the poultry products supplies. Therefore, the risks of further price increases have subsided somewhat.
Overall, there is increased uncertainty about South Africa’s consumer food inflation path for 2024. However, the underlying factors are not all one-sided, and one has to reflect on the price movements and weighting of various products when considering their food price forecast for the year.
From a policy perspective, the best approach should be to do nothing. If fiscal space permits, support to the farmers, especially in the hardest hit areas would be appropriate.
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by Wandile Sihlobo | Mar 29, 2024 | Food Security
South Africa’s consumer food inflation slowed to 6,0% in February 2024, from 7,0% in the previous month. This was underpinned by the deceleration across most food products, except for “sugar, sweets and desserts”, which remained roughly unchanged from the last months.
We expect this broad moderation path to continue for most of the products within the food basket over the near-to-medium term. However, there are significant upside risks for the “bread and cereal products” in the food basket because of the potentially poor white maize harvest on the back of the current heatwave and dryness.
There are notable crop failures in the western regions of South Africa, which are primarily white maize-producing regions. It is unclear what the white maize harvest will be as the weather conditions remain challenging. At the end of February, the estimates from the Crop Estimates Committee placed South Africa’s 2023/24 white maize harvest at 7,0 million tonnes, down 17% year-on-year. This estimate will likely be lowered over the coming months. We have gone through March with virtually no rains in the white maize regions.
While some may argue that ample maize supplies in the global market could cushion South Africa, the challenge with white maize is that it is not as widely traded. The bulk of global maize supplies is yellow maize. Indeed, there is a lot of maize in the world, with the International Grains Council (IGC) forecasting the 2023/24 global maize harvest at 1,2 billion tonnes, up 6% year-on-year. However, this will primarily be yellow maize, and the demand for white maize will likely increase.
In addition, the demand for white maize will be a South African challenge and a Southern African regional challenge. Therefore, there could be a disconnect between the domestic white maize prices and the general global maize prices, which are likely to continue softening due to improved supplies. For example, a large spread exists between South Africa’s futures prices of yellow and white maize following reports of bad crop conditions. At the end of the week of March 22, South Africa’s white maize spot price closed at R5 159 per tonne, while yellow maize was R4 258 per tonne. This signifies the challenge with white maize supplies.
The products that play favourably for South Africa are wheat and rice, which South Africa remains a significant importer of. There are large supplies of these products in the global market. The IGC forecasts the 2023/24 global wheat harvest at 789 million tonnes, well above the long-term average. There is a lot of rice globally, with the 2023/24 global harvest forecast at 511 million tonnes, well above the long-term average.
The stocks of these commodities are at comfortable levels; thus, the international grain prices have continued to moderate. For example, the Food and Agriculture Organization of the United Nations (FAO)’s Food Price Index, which measures the monthly change in international prices of agricultural commodities, averaged 117.3 points in February 2024, down 1% from its revised January level and 11% from last year’s corresponding period. The broad decline in grains and oilseed prices underpinned this moderation, again underscoring the importance of improved supplies in the 2023/24 season.
The exchange rate will also matter much, as South Africa imports roughly half of its annual wheat and rice consumption.
Another major factor driving South Africa’s food inflation this past year was the increase in prices of vegetable and poultry products. The poor harvest caused the vegetable price increases after load-shedding at the start of the year, undermining crop quality. Things have changed this year. While it has been quite dry across the country since the beginning of February 2024, vegetable production has not taken a strain because all commercial production in South Africa is under irrigation, and load-shedding has not been intense.
Moreover, meat prices rose at the end of 2023 due to supply constraints of poultry products on the back of avian influenza. But there is now anecdotal evidence that the restocking process is underway and there is improvement in the poultry products supplies. Therefore, the risks of further price increases have subsided somewhat.
Overall, there is increased uncertainty about South Africa’s consumer food inflation path for 2024. However, the underlying factors are not all one-sided, and one has to reflect on the price movements and weighting of various products when considering their food price forecast for the year.
Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za
by Wandile Sihlobo | Mar 17, 2024 | Food Security
The damaging effects of persistent dryness and heatwave in South Africa’s summer crop-growing regions have raised concerns about a possible rise in consumer food inflation in the coming months. With South Africa’s food price inflation averaging 11% in 2023 (from 9,5% in 2022, 6,5% in 2021, and 4,8% in 2020)[1], which was relatively high compared with recent periods, talk of further upside pressure in inflation comes as an unwelcome development.
However, the underlying drivers of the increase in food inflation in the past two years were mainly the international agricultural commodity prices and, to a much lesser extent, idiosyncratic domestic factors. Still, towards the latter part of 2023, local factors such as animal diseases, weaker domestic currency, and load-shedding-related costs were some of the key drivers of food inflation.
The drought in South America, China’s strong demand for grains and oilseed, rising shipping costs, higher energy prices, and the Russia-Ukraine war were some of the factors that were behind the higher global agricultural producer prices, which, in turn, boosted the domestic prices, and thus leading to relatively elevated consumer food price inflation in 2022 and 2023.
Also worth noting is that South African food manufacturers had to absorb some of the increases and did not pass on the full increases to consumers who were already under pressure because of weak economic conditions and higher unemployment in the country.
For example, in 2022, while consumer food inflation averaged 9,5%, the producer price inflation for agricultural products was 15,0%, and the food manufacturers inflation was 12,3%. This means manufacturers did not pass on the total costs to consumers, contrary to what some regulators have argued.
Drivers of consumer food inflation in 2024
The factors that underpinned higher consumer food inflation in 2022 and 2023 have somewhat subsided. There are ample grain supplies in the global market, with the 2023/24 global maize harvest forecast at 1,2 billion tonnes, up 6% y/y, according to data from the International Grains Council (IGC).
The IGC forecasts that the 2023/24 global wheat harvest will reach 788 million tonnes, which is well above the long-term average levels (albeit down 1% y/y). There is also a lot of rice globally, with the 2023/24 global harvest forecast at 511 million tonnes, well above the long-term average (but down 0,6 y/y). The 2023/24 global soybean harvest is estimated at 391 million tonnes, up 5% y/y.[2]
These global production forecasts also imply a general improvement in the stocks of these major commodities and a moderation in prices. For example, the Food and Agriculture Organization of the United Nations (FAO) recently released its Food Price Index for February 2024. This index measures the monthly change in international prices of agricultural commodities, not final food products. The FAO Food Price Index averaged 117.3 points in February 2024, down 1% from its revised January level and 11% from last year’s corresponding period. The broad decline in grains and oilseed prices underpinned this moderation, again underscoring the importance of improved supplies in the 2023/24 season.
Aside from the international factors, other major factors driving South Africa’s food inflation this past year was the increase in vegetable and poultry products prices. The poor harvest caused the vegetable price increases after load-shedding at the start of the year, undermining crop quality.
Things have changed this year. While it has been quite dry across the country since the beginning of February 2024, vegetable production has not taken a strain because all commercial production in South Africa is under irrigation and load-shedding, while risk has not been hard since the start of 2023. Some farmers are better prepared this year for possible regular power cuts.
Moreover, meat prices rose at the end of 2023 due to supply constraints of poultry products on the back of avian influenza. Data from the Bureau for Food and Agricultural Policy (BFAP) shows that around 9,5 million birds had to be culled in 2023, leading to a decline in the commercial layers and broilers and an increase in eggs and meat prices.
But there is now anecdotal evidence that the restocking process is underway and there is improvement in the poultry products supplies. Therefore, the risks of further price increases have subsided somewhat.
Risks to consumer food inflation
Considering the above developments, the major risks to consumer food inflation in South Africa in 2024 will primarily be white maize products, while other products within the food basket may moderate or show sideways movement in prices.[3]
Indeed, for wheat and rice, the exchange rate also matters as South Africa imports roughly half of its annual wheat consumption and all of its rice consumption. Still, the challenge presented by persistent dryness domestically, at least over the near-to-medium term, is white maize supplies and the potential price reaction to reduced supplies. It is unclear what the white maize harvest will be this year.
The figures released by the Crop Estimates Committee at the end of February are not as dependable this time. The weather has remained scorching since releasing these figures, so the crop conditions have worsened. At the time, the Crop Estimates Committee stated that white and yellow maize harvest could be 7,0 million tonnes (down 17% y/y) and 7,3 million tonnes (down 8% y/y), thus placing the overall maize production estimate at 14,3 million tonnes (down 13% y/y).[4]
The challenge for maize is the possible poor yield in some regions as the area plantings are higher than the 2022/23 season. While this expected harvest is significantly lower than the previous season, if it materializes, it would still meet South Africa’s annual maize consumption of roughly 12,00 million tonnes, and the country would remain a net exporter of maize, although a much lower volume than the previous years.
However, this may not materialize, given the ongoing heatwave and lack of rainfall. Therefore, we see upside risks in maize prices and grain products in the consumer food inflation basket.
Concluding remarks
In essence, there is increased uncertainty about South Africa’s consumer food inflation path for 2024. However, the underlying factors are not all one-sided, and one has to reflect on the price movements and weighting of various products when considering their food price forecast for the year.
The significant risks and favourable drivers are outlined in this note for consideration when thinking about the path ahead and where the current dryness would hit the most within the South African consumer food basket.
An extract of this piece first appeared on Business Day.
[1] This is according to data from Stats SA that can be accessed in their website here: https://www.statssa.gov.za/#
[2] One has to pay to access this data, but for the sake of completeness, it is all available here: https://www.igc.int/en/default.aspx
[3] This is a challenge not only for South Africa, but the entire Southern Africa region. Lord knows where folks will get maize from, perhaps Mexico can help if we chat with them on time. Read more here: https://theconversation.com/dry-weather-hits-southern-africas-farmers-putting-key-maize-supplies-at-risk-how-to-blunt-the-impact-224974
[4] The data is available under the “2024” tab here: https://www.sagis.org.za/cec_reports.html
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by Wandile Sihlobo | Feb 21, 2024 | Food Security
South Africa’s consumer food inflation slowed to 7,0% in January 2024, from 8,5% in the previous month. This was underpinned by the deceleration across most food products, except for the sugar, sweets and desserts.
We expect this broad moderation path to continue in 2024 for most of the products within the food basket, assuming that domestic agricultural conditions improve and South Africa gets a decent summer grain and oilseed harvest.
While the summer grain and oilseed 2023/24 production season started favourably, with farmers planting roughly 4,4 million hectares, up by 0,4%, the production conditions have increasingly become worrying.
Since the start of February, the rain has been scant across the summer crop-growing regions of South Africa, thus raising concerns about the potential yield loss of the crops. In various areas, significant summer grains such as maize, sunflower seed, and soybeans are in the pollination stages this month. The crop should ideally have higher moisture levels during this pollination stage to boost yields. However, the crop enters this growth stage with limited moisture across the major growing regions.
These current weather conditions have raised fears about the possible yield loss. The consensus in the sector is that the last two weeks of February and the first week of March are critical for the crop. This means South Africa must receive widespread rains this week or next week for the crop to recover from its current worrying state.
Regarding meat, a significant upside risk to food inflation in the past few months, the supplies seem to have recovered after the widespread avian influenza in 2023 that sparked concerns. The recovery in poultry production follows a range of interventions that the industry and the government embarked on at the end of last year.
These include importing fertilized eggs to rebuild the parental bird stock lost from avian influenza, importing table eggs, and improving biosecurity control measures. Another additional policy measure the government has is easing the poultry product imports in the event of supply constraints, which we do not anticipate over the foreseeable future.
The fruit and vegetable prices, which also increased notably at the end of 2023, will likely continue to slow in the coming months as the volume of products increases in various Fresh Produce Markets. Unlike field crops, the horticulture industry is under irrigation and thus benefits from improved dam levels in the current dry spell and high temperatures in various regions.
Also worth noting is that international agricultural commodity prices continue to decelerate from the higher levels we saw a year ago because of expected decent global grains and oilseed harvest. This deceleration further supports our optimism about the potential continuous slowing of domestic food inflation.
For example, the FAO Food Price Index, which measures the monthly price changes of agricultural commodities, fell by 1% in January 2024 from its December level and is 10% lower than a year ago.
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