Despite consumer inflation increasing to 4.5% in May its highest level in 22 months on Wednesday, food inflation continues to decline, dropping 1.6% in May 2026. Civil society groups have welcomed the drop in food inflation.
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Despite consumer inflation increasing to 4.5% in May its highest level in 22 months on Wednesday, food inflation continues to decline, dropping 1.6% in May 2026. Civil society groups have welcomed the drop in food inflation.
According to Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa (Agbiz), the decline in food inflation reflects improved supply conditions both locally and internationally.
“There was a broad deceleration across the various food products. At the core of moderating consumer food price inflation are lower prices for grains and oilseeds, fruit, and vegetables, driven by ample domestic and global supplies.”
Sihlobo added that they continue to believe that meat poses minimal risks to inflation, and meat price inflation has slowed in recent months.
“Base effects on meat prices, along with continued cattle slaughter, have helped ease price inflation. Poultry production conditions are also favourable.”
Sihlobo said that cereal products' price inflation indicates they are in yet another better grain production year.
“South Africa’s summer grains and oilseeds production is forecast at a record 21.1 million tonnes, up 2% from the 2024-25 season. This figure comprises maize, sunflower seed, soybean, groundnuts, sorghum, and dry beans. This ample harvest adds to already large stocks from the past season, keeping grain prices under pressure.”
Sihlobo added that global grain prices are also under pressure from large harvests, adding to the downward pressure from domestic factors.
“The expected El Niño will only affect the 2026-27 crop, which comes to market in mid-2027.”
Sihlobo said that in fruits, while the recent floods are destructive in parts of the Eastern and Western Cape, the country’s fruit harvest is ample.
“We are even seeing strong exports of citrus, table grapes, and stone fruits, among others, due to a large domestic harvest.”
Sihlobo added that regarding meat, the pace of cattle slaughter has declined somewhat, though not notably.
“Another fact worth keeping in mind is that during foot-and-mouth disease outbreaks, the country is typically temporarily closed to some export markets, leading to increased domestic supplies, even if slaughter has declined somewhat.”
Evashnee Naidu, KwaZulu-Natal regional manager of Black Sash, said the organisation welcomed the decline in food inflation but stressed that many essential goods and services continue to become more expensive.
“Despite this, certain essential goods have been impacted and have shown a marked increase. Household food baskets will fluctuate based on the type of goods that each household is able to afford and can reasonably be able to afford.”
Naidu added that public and private transport costs have increased significantly, and whilst there is hope for a fuel price reduction in July, with the reinstatement of the fuel levy, this decrease will not materially support households and individuals with much savings.
Siyanda Baduza, a basic income researcher at the Institute for Economic Justice (IEJ), echoed these concerns, noting that lower-income households often experience inflation differently from wealthier consumers.
“Though, of course, the basket for an average household and a poor household differs, the basket commonly consumed by lower-income households has risen in price over the past few months. One must also consider that while the cost of food may be lower, the rest of the CPI has not followed suit, and interest rates have increased.”
Meanwhile, Mervyn Abrahams, director of the Pietermaritzburg Economic Justice & Dignity Group (PMBEJD), said food inflation figures should be viewed alongside broader economic realities.
“If there is no indication that incomes for workers have increased significantly over the past months, coupled with other rising costs such as water, electricity, and transport, then any talk of food inflation does not make that much of a difference to consumers.”
Abrahams added that food prices are affected by a number of factors including input costs such as diesel during planting and harvesting times, as well as processing and transporting from points of production to consumption points.
“We have seen over the past weeks and months how the Middle East conflict has pushed diesel prices up, resulting in an increase in some food items.”
Abrahams concluded that they remain cautiously optimistic that peace talks will yield the desired outcome in the form of lasting peace because that would stabilise fuel prices and possibly see food prices moving towards what we witnessed at the beginning of the year.
BUSINESS REPORT