Consumer Price Index (CPI) for October 2023

The recently released Consumer Price Index (CPI) for October 2023 by Statistics South Africa (Stats SA) showed that the annual headline CPI stood at 5.9%, slightly exceeding the 5.4% recorded in September 2023. Similarly, the inflation rate for food and non-alcoholic beverages rose to 8.7%, a marginal increase from the 8.1% reported in September 2023. The notable upticks in both headline CPI and non-alcoholic beverages inflation were driven by significant increases in various food categories. Vegetables witnessed a substantial surge of 23.6% in October 2023, followed by sugar, sweets & desserts at 17.6%, milk, eggs & cheese at 12.4%, other foods at 11.3%, unprocessed foods at 9.7%, bread & cereals at 8.8%, fruits at 8.5%, processed foods at 7.9%, fish at 7.7%, and meat at 3.4%. The November NAMC Food Baskets report can be accessed online:

The rising food prices in South Africa are a concern for many households, especially those with limited income. According to the Household Affordability Index by the Pietermaritzburg Economic Justice & Dignity Group (PMBEJD). The rising food prices in South Africa are a result of various factors, including the global food price inflation, supply chain disruptions, and the depreciation of the rand.

The avian influenza has been the main cause of egg supply constraints, which have eased although not completely disappeared. Vegetable prices, particularly potatoes, have increased due to reduced harvests following quality issues caused by irrigation disruptions during the year's first half. However, interventions are being implemented to address the poultry sector's challenges, such as importing fertilized eggs to rebuild the parental bird stock, importing table eggs, and exploring possible vaccinations to control the spread of the disease. These efforts are expected to normalise egg prices in the coming months. The eggs category has a lower weight within the food inflation basket, at 0.4%, so its impact on the overall inflation figure may not be as significant. A similar recovery in vegetable and fruit supplies is anticipated in the near future, which could help alleviate current price pressures. Load-shedding reductions and farmers' investments in alternative energy sources have improved production conditions. Overall, we remain optimistic that South Africa's consumer food price inflation will decrease in 2024, with products like grain-related items and fats and oils likely driving the trend.

Authors: Thulani Ningi (2023) and Wandile Sihlobo (2023)

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