Share

Sugar, milk, meat price hikes could stay high

Cape Town - South Africa’s annual food and beverages inflation fell to 8.7% year-on-year (y/y) in March 2017 from 9.9% in February 2017 - the lowest level in 14 months.

While overall food inflation is likely to decelerate further over the coming months on the back of large supplies, sugar, milk and meat inflation could remain at relatively higher levels, according to Wandile Sihlobo, agricultural economist at the Agricultural Business Chamber (Agbiz).

"As the winter season approaches, milk production could decline, in line with seasonal trends," he added.

He pointed out that the benefits of the uptick in agricultural production are already reflected in food prices. This is despite lag effects between the decline in agricultural commodity prices and retail food prices.

INFOGRAPHIC: How food prices spiked in the last year

The general drop in food inflation is largely on the back of a broad recovery in agricultural production, said Sihlobo.
 
Maize production is estimated at 14.3 million tonnes, the second-biggest crop on record after 1980/81.

"This uptick in production is underpinning a bearish trend in agricultural commodity prices, which is expected to prevail for the better part of the year," he explained.

However, the picture of the food inflation basket was mixed. While the majority of products decelerated, non-alcoholic beverages, sugar, sweets and desserts accelerated.

The uptick in sugar, sweets and desserts is partly on the back of an expected decline in sugar production this year. BMI Research forecasts a 1% fall in SA’s 2017 sugar production to 1.66 million tonnes.
 
According to Sihlobo, this would be the second consecutive annual decline, following a 23% drop in 2016 due to the drought.

Meat inflation remained unchanged from the previous month at 9.9% y/y as slaughtering activity slowed down, with farmers continuing to restock their herds following a drought season.

In February 2017, farmers slaughtered 192 186 head of cattle, a 17% annual decline.


Read Fin24's top stories trending on Twitter:


We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.88
+0.3%
Rand - Pound
23.87
+0.2%
Rand - Euro
20.39
+0.2%
Rand - Aus dollar
12.33
+0.1%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent-ruolie
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders