Stats SA has published data on some of South Africa’s most popular retail items, highlighting how the price of groceries has increased in the country over the last three years.
While some items – such as mielie meal – have seen a decrease in price over the period, the bulk of the products have seen a steady rise over the time period.
Meat prices have seen some of the biggest price increases with a kilogram of rump steak 15% more expensive than it was in January 2017. Similarly, the cost of biltong per kg has increased by over R30 over the last three years.
Another notable increase can be seen in the price of avocados which Stats SA attributes to a current shortage and seasonal fluctuations. The average price of a single avocado in June 2018 was R6.78. In January 2020, the price was R18.04.
Other notable increases include chicken portions (+14.7%), chocolate (+4.5%) and full cream milk (+5.97).
Food inflation is still low but is expected to rise
The latest CPI data shows that food and non-alcoholic beverage inflation declined to 3.7% y/y in January 2020 from 3.9% y/y in December 2019, but the monthly momentum rose moderately.
Three out of nine goods in the food inflation basket reported a slowdown in January 2020, data from financial services firm, Momentum found.
Bread and cereal inflation reported the most significant reduction in January 2020 to 6.0% y/y from 8.0% y/y.
Meat inflation rose marginally to 2.2% y/y, up from 2.0% in December 2019, explained by a gradual normalisation in meat prices.
“The longer-than-expected ban on foot-and-mouth disease was lifted in February 2020 which will likely accelerate the normalisation in meat prices going forward,” said Momentum.
“This is underpinned by uncertain weather conditions and the late planting due to late rains (see chart 6). This below-market harvest expectation by Agbiz leads to a high likelihood of South Africa being a net maize exporter in the 2019/20 marketing year.”
Momentum added that the SA Weather Service expects below normal rainfall between February and April 2020 which might limit summer crops but climate change has elevated the uncertainty element in these forecasts which may not materialise.
“We expect food inflation to continue to rise gradually and reach around 5% in 2020 and peak marginally above 6% in 2021,” Momentum said.