End-of-year data by Stats SA (Statistics South Africa) shows a quarter 3 decline in the agricultural sector by 9.6%. This is even as the long-standing consumer inflation slowed by 5.5% in November. 

The decline owes mainly to a slump in the cultivation of crops, low supply in animal products and port delays. The three factors edged the production part of the GDP by -0.3% of a point. 

Field crops in Western Cape suffered a blow due to floods while the poultry sector had to deal with avian flu. The soy sector, on the other hand, coped with load shedding which affected soy meal production.

Consumer Inflation slows to 5.5% but food up by 9%

A major factor that slowed agriculture was inflation, which declined in November for non-agricultural commodities but upped in food. 

The national consumer price index (CPI) fell by 0.1% in November and cooled general consumer inflation to 5.5%. Stats SA attributes the CPI decline to a fall in fuel prices by 1.8% by November, a 9.4% drop from the October peak.

While the fall in fuel cost eased transport prices, it did not benefit food and beverages, whose inflation rose to 9%.

Onion, vegetable and cereal prices were the only favourable exceptions in the food sector. The price of onions lowered by 6.1% by November, a considerable drop as onion inflation had hit 64.5% in June.  This is even as increase in onion acreage raised supplies during this period.

Vegetable inflation simmered down to 23.5% in November from the October high of 23.6%. The cereal and bread industry saw a seven-month gradual price decrement by November to settle at 8.5% in inflation. 

Almost all other food classes attracted a 4-month spree in inflation, which peaked in November. Chicken inflation, for one, rose by 7.3% November due to avian flu fears which cut poultry supplies.  

Fruits’ annual inflation ticked up by 11.5% by November, almost close to end 2020’s reading of 11.8%. Black spot disease outbreak negatively impacted the citrus export sector, affecting production and rebounded on price.  This is despite a rise of 1% for South Africa’s citrus exports for 2023  over 2022’s.

Sugar edged up by 18.5% and so did egg prices, which hit 10.6% inflation by November. This happened in the background of reigning poor performance in the poultry sector.

PPI inflation slows by 0.6%

The October-November period also saw the producer price index (PPI) inflation, a major indicator of consumer inflation, fall by 0.6%. 

This impressive improvement banked on the fall in fuel prices but not in food. The food sub-sector pressured PPI inflation by –1.2%.

Ultimately, analysts see a downward trend in food inflation in 2024 as port congestion in South Africa eases and quickens food imports.