Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN) Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN)

Quarterly Food Price Monitor: November 2009
November 2009

Acknowledgements: FANRPAN acknowledges National Agricultural Marketing Council (NAMC) as the source of this document

The consumer Price Index (CPI) report released by Statistics South Africa (Stats SA) in November 2009 confirms that food inflation is currently within the South African Reserve Bank’s target inflation brackets. The year-on-year (i.e. October 2008 to October 2009) increase in the CPI for food and non alcoholic beverages, as reported by Stats SA, was 5.3%.

Across the world food inflation slowed over the last number of months. South Africa’s food inflation compares favourably with that of other African countries, but is still higher than in most developed countries.

Prices of the most important grain commodities declined significantly compared to the last quarter of 2008. On average, many grain product prices at retail level in urban areas declined, while inflation for grain product prices in rural slowed significantly. Inflation pressure is significantly weaker in the unprocessed animal protein sub-sector, but is still relatively strong as far as the processed product is concerned. Inflationary pressures in the vegetables sub-sector remain strong, while the fruit sector shows signs of slowing price increases.

Although the price difference between selected food items between rural and urban areas has narrowed, it is still significant. For similar items monitored in urban and rural areas the difference amounted, on average, to R15.46, which is marginally lower compared to earlier in 2009.

From October 2008 to October 2009 the cost of a basic food basket increased by R35 (10%) to R376 in nominal terms. This increase took place between October 2008 to January 2009 (10%), whereafter the cost of the food basket remained relatively stable until October 2009.

Consumer spending remains under pressure, and this situation is expected to continue until at least mid-2010. This is despite the fact that the economy is showing signs of recovery.

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