Although July 2021 consumer food price inflation of 7% y/y is unchanged from the previous month, there are clear signs in the underlying details that pressures are beginning to moderate.
The global agricultural commodity prices in the second half of the year could continue softening slightly from the level of recent months. If this transpires, South African grain prices should follow a similar path, which bodes well for consumer food price inflation.
With ample agricultural harvests, why is South Africa still seeing food prices rising – and what is the outlook for the rest of the year?
Production forecasts suggest that global crop prices from June going forward could soften slightly from the recent months’ levels, which could also influence the South African consumer food price inflation outlook.
Statistics South Africa reported much higher figures for consumer food price inflation than some had expected. In April 2021, the country’s consumer food prices were at 6,7% year-on-year, the highest level since July 2017.
Most food-insecure provinces also have vast tracts of underutilised land. These provinces should be a priority in the agriculture and agro-processing master plan. With a commercial focus where conditions permit, agriculture improvement would help job creation and, ultimately, household food security.
