South Africa’s food inflation is likely to remain low this year, but to rise into 2027, stoked by hotter weather and high fuel, fertiliser and electricity prices, the Bureau for Food and Agricultural Policy (BFAP) predicts.
In its monthly food inflation brief, the BFAP notes that food inflation in April dropped to 2.9% from 3.6% in March. This is the lowest food inflation level in 14 months, but the cycle is about to turn.
Beef remains a major driver of food price inflation, because of the impact of food and mouth disease in cattle. Pork prices have also risen due to shortages following outbreaks of African swine fever. The BFAP expects meat prices to drop in the months ahead, and this, together with good grain harvests, should support a continuing easing of prices.
However, it warns, a recovery in regional demand, sustained increases in fuel and fertiliser prices if the Middle East conflict persists, and adverse weather associated with the predicted El Niño cycle could reduce future planting and summer crop output into 2027.
This would tighten supply and place upward pressure on food prices over the medium term. In addition, higher electricity and fuel costs are increasing processing, packaging, and distribution expenses across the value chain.
“These cost pressures are contributing to the increasing disconnect between retail food prices and on-farm producer prices,” the BFAP states.
