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.
South Africa is a food secure country at national levels. Still, the household level is food insecure, and the numbers increase because of the pandemic’s economic shock. There are risks to the country’s food security, which policymakers, farmers and agribusiness will need to monitor closely.
South Africa’s food price inflation softened to 5,6% y/y in January 2021, from 6,2% y/y in the previous month. The deceleration was in most product prices in the food basket except for bread and cereals, which accelerated from the levels seen in December 2020. Nevertheless, this was overshadowed by the slowing price inflation in meat; fish; milk, eggs and cheese; fruit; and vegetables.
The current increases in agricultural commodity prices is a global issue, but an expected sizable South Africa’s maize harvest could help ease price pressures in the coming months.
