Good news for braai lovers in South Africa
While food prices in South Africa remain sticky at an elevated rate, the pace of acceleration is easing and possibly faster than is reflected in the official data, reported Bloomberg.
The cost of a basket of goods in Bloomberg’s South African Shisa Nyama Index – designed to show the cost of traditional backyard braais – rose 12% year-on-year in May.
However, this is a sharp decline from 19% in February and a third consecutive monthly slowdown.
A continuation of this trend will provide welcome relief for consumers who are also contending with high fuel prices, widespread unemployment, daily electricity outages and a stagnating economy.
Consumer prices rose 6.8% year-on-year in April, down from 7.1% the previous month, with food prices increasing 14.3%, according to Statistics South Africa. Official data for May is scheduled to be released on June 21.
Crunching data from the Pietermaritzburg Economic Justice and Dignity Group, Bloomberg’s index tracks the prices of some of the key ingredients in a braai – corn meal, onions, carrots, tomatoes, curry powder, salt, frozen chicken portions, beef and wors.
To compile its survey, the PMBEJD’s data collectors track food prices on the shelves of 44 supermarkets and 30 butcheries that target the low-income market in the greater areas of Johannesburg, Durban, Cape Town, Pietermaritzburg, Springbok in the far northwest and the far northeastern town of Mtubatuba.
The cost of three items in the index – green peppers, cooking oil and samp – fell in May from the month before.
The data shows that meat prices are expected to come down in South Africa in the coming months, with the Bureau for Food and Agricultural Policy’s (BFAP’s) latest data also showing that pricing pressure on meat is starting to ease.
The BFAP noted that beef carcass prices have declined by around 8% since January and, in May 2023, were more than 10% below May 2022 levels.
“Prices are expected to dip further in the next three months – mid-May to mid-July – due to seasonality and meat availability in the market. This trend in lower prices will mainly impact cheaper cuts in the Northern parts of the country, where approximately 40% of the consumption is situated,” it said.
There’s no guarantee the downward trajectory in food inflation will be maintained. The daily power outages imposed on the country by state electricity utility Eskom are increasing the cost of food production. Still, the decline in the pace at which these food prices are rising is promising.
Roelie van Reenen, supply chain executive at Beefmaster Group, noted that producers are operating under extremely difficult circumstances, and the situation will likely remain challenging for the remainder of the year.
“I anticipate at least six to eight months of tough times ahead. However, we must remain optimistic and focus on producing cheaper, smarter, and more market-oriented products to protect our industry,” he said.
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