Sunday, December 3

Inflation on domestic food prices may have a turnaround as regards the Global Market

South African families are struggling to make ends meet.1 An average family of four is struggling to afford basic food.2 For a couple and their two children basic healthy eating food costs about R 3, 614.3 This is around R 443 more than a year ago.4 This is according to the latest research by the Bureau for Food and agricultural Policy (BFAP) which showed that South Africa’s food inflation was still stubbornly high at 11.8 percent – but was showing signs of decline.5 The BFAP Thrifty Healthy Food Basket (THFB) measures the cost of basic healthy eating for low-income households in South Africa.6  The methodology considers national nutrition guidelines, typical food intake patterns of lower-income households, official Stats SA food retail prices, and typical household demographics and consists of a nutritionally balanced combination of 26 food items from all the food groups.7

The BFAP “Food Inflation Brief” had been released on Monday also showed that the country’s food market  was a tale of contradictions (it did not show a pattern that conformed) –  On one hand, we have bumper summer crops and a decline in international grain prices, while on the other, we see import-parity on wheat prices as well as high fruit and vegetable prices.8


Rasulullah ﷺ said, ” Whoever relieves a believer’s distress of the distressful aspects of this world, Allah will rescue him from a difficulty of the difficulties of the Hereafter.”

Add in meat price inflation, exchange rate dynamics, load shedding and it becomes hard for the everyday South African consumer. The good news for South Africans though was that there are signs of a “solid turnaround” on inflation which augurs well on the pockets of consumers. According to the research, the country is set for another flourishing summer crop, particularly for maize and soybean, which is expected to exceed 16 million tonnes. This robust yield means that our exportable maize could surpass 3.5 million tonnes for the third year running, leading to lower domestic prices. The record soybean crop should follow a similar trend, with prices remaining at export-parity levels.

However, South Africa’s heavy reliance on wheat imports (almost half of our needs) means that domestic prices are set at import-parity levels, remaining susceptible to global price shifts. Moreover, the impact of foreign exchange rates also plays a key role in defining domestic prices. At the global level, May 2023 saw a continuing dip in grain and oilseed prices, largely due to the extension of the Black Sea Grain Initiative and expectations of abundant global supply for the 2023/24 season. This decline in prices was further driven by anticipated higher maize production from heavyweights like Brazil and the US, coupled with a decrease in Chinese purchases from the US. (South Africa’s Food Inflation: A Turnaround in sight amidst global and domestic challenges)

Food security is an essential part of improving the lives of a citizens in every nation. The government both at national and provincial levels needs to combat the harm done by load shedding, price inflation and the dynamics of the exchange rates.1 Pretoria needs to subsidize foods such as meat, fruit and vegetables.2 The good news means that the government and agricultural manufacturers need to learn from the mistakes of their previous practices and use it to improve farming yields. The state needs to facilitate the use of drip watering and natural fertilizers. The growth of crops that take in little water such as maize and soya beans is a good sign the country is heading in the right direction.  

The country’s dependence on wheat imports needs to stop. There needs to be consideration for creating other sources of grain, possibly even growing some of it on our own soil. I do not know if grain can be genetically engineered in a lab. But if it is possible to grow a cheaper variety of wheat on South African soil then we should try that. This could even be a source of hope for the rest of the African continent. With the war going on in Ukraine and Russian President Vladimir Putin being ambiguous over the grain deal we need new alternatives. South Africa is fortunate to be at the crossroads between the routes of the Atlantic and Indian Oceans. It enables us to sustain our way between the Americas, India and the Far East. Only time will tell how we manifest the opportunities between the rest of the world and ourselves.

Article written by: Yacoob Cassim

Subscribe to our newsletter to never miss exclusive deals
Please enable JavaScript in your browser to complete this form.