Food price shocker for South Africa

 ·19 Oct 2022

Annual consumer price inflation slowed marginally to 7.5% in September from 7.6% in August, edging down further from the 13-year high of 7.8% recorded in July.

The easing of inflation was mainly driven by fuel prices declining for a second consecutive month, contributing to the softer headline rate.

However, food price inflation continued to accelerate, Stats SA said, hitting 11.9% in September.

According to Stats SA, for much of this year, inflation has been driven mainly by sharp increases in food & non-alcoholic beverages (NAB) and fuel prices.

The CPI, excluding these two categories, registered an annual increase of 4.9%, up from 4.6% in August, indicating that higher inflation has spread beyond these two groups.

Fuel prices declined by 6.4% between August and September. This slowed the annual rate to 34.1%, which is down from the high of 56.2% reported in July.

However, despite the softening of fuel prices, annual food & NAB inflation continues to accelerate, increasing to 11.9% from 11.3% in August.

Stats SA noted that the 0.5% monthly increase was lower than the 1.8% monthly rise recorded in August, pointing to signs of food inflation slowing.

Bread & cereal and meat inflation showed a similar pattern, it said.

The annual rate for bread & cereals accelerated to a 13-year high of 19.3% in September. Annual meat inflation increased from 9.2% to 9.9% – however, both increases were lower than in the previous month.

“After sustained price increases during much of the year, the index for oils & fats tumbled by 6.1 percentage points between August and September. This dragged the annual rate down to 29% from 37.6% in August,” Stats SA said.

Prices for sunflower oil decreased by 8.0 percentage points in the month, with the average price of a 750 ml bottle of cooking oil falling to R41.38 from a high of R45.33 in July.

Despite this decrease, the price is still significantly higher than the R30.98 consumers paid in September 2021.

There were also notable price increases for rentals, clothing, accommodation services and personal care, Stats SA data showed.

Here are the items with inflation above 10%, or outside the Reserve Bank’s target range of 4% to 6%:

  • Fuel: +34.1%
  • Oils and fats: +29.0%
  • Public transport: +22.1%
  • Breads and cereals: +19.3%
  • Processed food: +15.1%
  • Hot beverages: +12.0%
  • Other food: +11.6%
  • Vegetables: +10.6%
  • Hotels: +10.5%
  • Meat: + 9.9%
  • Unprocessed food: +9.3%
  • Fish: +9.1%
  • Milk, eggs and cheese: +9.0%
  • Sugars, sweets and desserts: +8.9%
  • Electricity and other fuels: +8.3%
  • Personal care: +8.3%
  • Vehicle running costs: +7.4%
  • Spirits: +7.4%
  • Restaurants: +6.9%
  • Cold beverages: +6.8%
  • Beer: +6.1%

Data informing both actual and imputed rentals are included in the CPI every quarter. The annual rate for actual rentals in September was 2.8 percentage points, the highest reading since February 2020 (3.0pp). Imputed rentals increased by 3.2 percentage points, the highest annual reading since August 2019 (3.3pp).

Clothing and footwear prices increased by 2.8 percentage points from September 2021, the highest annual rise since August 2017 (2.9pp).

Prices for accommodation services1 increased by 6.0 percentage points between August and September. This took the annual rate for accommodation services to 10.5%, the highest it has been since March 2014 (10.9%).

Personal care products registered an annual rate of 8.3%, the highest since December 2009 (9.7%). The monthly increase for personal care products was 1.9 percentage points, more than double the 0.8 percentage points recorded in August.

The charts below show the products that recorded the largest percentage price increases in September.

Read: What to expect from the rand, food and fuel prices for the rest of the year

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