By Wandile Sihlobo, Business Day, 20 November 2019
Since the news that South Africa could be hit by yet another drought, a frequent topic of discussion has been its possible implications on South Africa’s food price inflation. This comes at a time when South Africa’s food price inflation has generally been subdued, having averaged 2.9% y/y in the first nine months of this year.
This is because of relatively lower meat, milk, eggs and cheese prices, amongst other products, which managed to overshadow the price increases of grain-related products over this period. The lower consumer demand has also played a part in this inflation development as consumer food price movements have not necessarily moved in conjunction with producer price inflation as has been the case in the past.