Food prices to remain high despite easing of consumer price inflation

Business

Johannesburg – Food prices could remain relatively high in the short- to medium-term period due to recent supply disruption, in spite of consumer inflation easing from a 30-month high in June, said analysts yesterday.

Data from Statistics South Africa (StatsSA) yesterday showed that annual consumer price index (CPI) eased to 4.9% year-on-year in June from 5.2% in May. The CPI, however, rose slightly by 0.2% in June from 0.1% in May.

StatsSA said the change in the June CPI print was driven by food and non-alcoholic beverages as prices remained unchanged at 6.7% in this category. However, StatsSA said there was an average price increase of 0.2% between May and June in this category.

According to Nedbank senior economist Nick Weimar, the trend of elevated food prices was likely to continue to raise the cost of living overall.

“Although prices are expected to return to trend in the months ahead, food and fuel supply constraints caused by the recent unrest in crucial parts of the country pose significant upside risks to the outlook,” said Weimar.

“Furthermore, concerns over the surge in global inflation and the earlier-than-expected normalisation of global monetary policy also poses upside to the inflation outlook.”

StatsSA’s chief director for price statistics Patrick Kelly said the prices of oils and fats continued to surge, registering the highest annual increases in June.

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