Bureau for Agricultural Policy says high food prices are here to stay
Food price inflation in SA is likely to remain in double digits this year even as global food inflation continues to ease.
Davids was speaking at the launch of the bureau’s 10-year agriculture market outlook for SA on Wednesday. Sustained easing in agricultural commodity prices could, however, see a slowdown in average food inflation in 2024 to about 5%. Load-shedding affects the entire value chain. It increases production costs and reduces production capacity. These factors are likely to drive inflationary in food value chains.
The effect of the weaker exchange rate is equally pronounced. The rand weakened 13.3% over the first five months of the year, which will have “a notable impact, keeping food inflation elevated”. Estimates published by the bureau indicate that this can add up to two percentage points to what average food inflation figures would have been if exchange rates were comparable to those at the beginning of 2023.
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