Headline CPI increased by 5.3 % between July 2010 and July 2011. Food and non-alcoholic beverages
inflation increased by 7.4 % between July 2010 and July 2011, the highest level since July 2009. This is
the fifth month in a row that food and non-alcoholic beverages inflation was higher that headline CPI and
also increased at a higher rate over this period. Since October 2010, food and non-alcoholic beverages
inflation has shown a strong increasing trend, from 1 % to 7.4 % in less than a year. The annual increase
of 7.5 % in the food and non-alcoholic beverages index was largely driven by the annual increases in oils
and fats (24.1 %), meat (11.4 %), bread and cereals (9.5 %) and sugar (8.9 %). The prices of processed
food products increased by 8.9 % from July 2010 to July 2011 and the price of unprocessed food products
increased by 6.2 % over the same period.
When comparing selected countries, Malawi, Zambia and Botswana experienced the highest overall
inflation, while Brazil, Turkey and South Africa had the highest inflation on food and non-alcoholic
When comparing prices of selected food items in the rural and urban areas of South Africa, rural
consumers paid R 12.06 more than urban consumers for the same food basket, a significantly lower price
difference than usually reported. Food items showing the largest price difference in July 2011 were rice
(2 kg) and sugar (2.5 kg).
From June 2010 to June 2011, the FAO Food Price Index increased by 43 %. The cereals price index
showed the largest increase of 76 % on an annual basis, followed by a 64 % increase in the sugar price
index. The price index for oils, meat and dairy increased respectively by 57.29 %, 21.87 % and 17.42 % on
a year-on-year basis.
From July 2010 to July 2011, the cost of a basic food basket increased by about R 24.70 (+6.7 %) in
nominal terms (compared to 3.3 % from April 2010 to April 2011). The cost of this food basket expressed
as a share of the average monthly income of the poorest 30 % of the population increased from 32.8 % in
July 2010 to 35.0 % in July 2011, representing the highest share during this analysis period. When
comparing the costs associated with the typical portion sizes of very poor consumers for the five most
widely consumed food items in South Africa, based on July 2011 versus July 2010 prices, the results
indicate inflation of about 11.6 %.