If we’re not paying over the odds for our petrol, we’re being asked to fork out more for our groceries. Data shared by economist Wandile Sihlobo and the Consumer Price Index (CPI) suggests that food prices are on the rise above inflation, after a relatively quiet start to 2019.
Food prices set to increase in South Africa
The year-on-year inflation rate had reached 2.3% for the first four months of the year. But May has shown a 0.5% increase, bucking the recent trends. According to Sihlobo, this will affect the total price of a normal food shop.
“After stabilizing at 2.3% on a year-on-year basis for four months, South Africa’s food inflation edged up to 2.8% in May 2019. This increase is broad-based across the food basket, with the exception of fruits, vegetables and sugar prices which slowed somewhat from April 2019.”
Wandile Sihlobo, agricultural economist
Groceries: Inflation over the past eight years
Although this latest increase won’t be as keenly felt as the year-on-year high of 12% felt at the start of 2017, This is likely to have a knock-on effect going forward, with supermarkets and other stores having to adjust their costs accordingly. As Sihlobo’s data shows, food prices and their inflation rates have been on a rollercoaster ride:
For perspective — this is how South Africa's food price inflation story has been over the past couple of years. 2/ pic.twitter.com/v4FnlD4DZE
— Wandile Sihlobo (@WandileSihlobo) June 19, 2019
Causes of a potential increase in South Africa’s food prices?
But what is behind this sudden disruption in the market? Well, much of it comes down to a poor grain harvest from the previous season. Nowhere in South Africa has been able to escape dry, arid conditions and some regions have been badly affected by the threat of drought.
According to the CPI, maize meal increased by 11.4% this year between January and May, and by 1.4% over April and May. This wild increase has had an impact on further food production, and a price hike for your groceries is inevitable based on these numbers.