Bountiful crop reserves helped slow food inflation in June, according to agricultural economist Wandile Sihlobo.
The announcement follows Statistics South Africa (Stats SA)’s report that consumer inflation accelerated to 5% in June from 4.5% in May, with transport costs contributing 1.7 percentage points to the annual inflation rate.
Sihlobo said food inflation slowed to 1.4% in June, its lowest level since December 2010.
He said while products such as oils and sugar recorded price increases, inflation for grains and fruit eased.
“The overall picture is that of a moderation in food price inflation. Of course, here we are talking about the rate at which prices are changing, but there are products that are in actual deflation. Grains are in deflation, fruits are in deflation, vegetables are in deflation, these prices are cheaper this year because of these ample supplies.”
Sihlobo said risks to food prices still exist due to the ongoing conflict in the Middle East.
“Remember, about 90, 80% of South African products are transported by road, agriculture, and the processed products. So, in times like this where fuel prices may go up at some point because of that ongoing war, that always remain a risk to food price inflation and upside risk.”
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