Since 2020, food price inflation in South Africa has increased year- after- year. In 2023, the index averaged 11% (from 9.5% in 2022, 6.5% in 2021, and 4.8% in 2020).

Unfavorable weather conditions for local agriculture, including persistent dryness and summer heatwaves, have consumers concerned about where inflation will go in 2024. According to a report by the Agricultural Business Chamber (Agbiz), the increase in food inflation in the past two years has resulted from international agricultural commodity prices and, to a much lesser extent, idiosyncratic domestic factors.

Additionally, local influences such as livestock diseases, weaker domestic currency, and load-shedding-related costs were key drivers of food inflation in 2023.

External influences

Global agricultural producer prices have been on the rise, driven by the drought in South America, China's strong demand for grains and oilseed, rising shipping costs, higher energy prices, and the Russia-Ukraine war. South African growers have had to absorb many of these costs without passing them directly to consumers, who were already under pressure due to weak economic conditions and high unemployment, according to the Agbiz report. 

Some factors, however, have partly subsided since 2022 and 2023, with ample grain supplies available in the global market.

Without a guarantee on future weather conditions, Agbiz said, “there is increased uncertainty about South Africa's consumer food inflation path for 2024.”

The Food and Agriculture Organization of the United Nations (FAO) recently released its Food Price Index for February 2024. This index measures the monthly change in international prices of agricultural commodities, not final food products.

The FAO Food Price Index averaged 117.3 points in February 2024, down 1% from its revised January level and 11% from last year's corresponding period. The broad decline in grains and oilseed prices underpinned this moderation, again underscoring the importance of improved supplies in the 2023-24 season.

According to the report, the major risks to consumer food inflation in South Africa in 2024 will primarily be white maize products, while other products within the food basket may moderate or show sideways movement in prices.