FOOD INFLATION BRIEF- BFAP South Africa

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 The BFAP Thrifty Healthy Food Basket (THFB) measures the cost of basic healthy eating for low-income households in the South African context.

The methodology considers national nutrition guidelines, typical food intake patterns of lower-income households, official Stats SA food retail prices and typical household demographics. Consisting of a nutritionally balanced combination of 26 food items from all the food groups, the BFAP THFB is designed to feed a reference family of four (consisting of two adults, an older and a younger child) for a month. The BFAP THFB comprises a smaller staple component and relatively more items from food groups contributing to dietary diversity than the CPI index. The CPI index is more reflective of ‘typical’ food preferences.

In South Africa, year-on-year food inflation was recorded at 6% in April, whilst month-on-month inflation edged up further by 0.6%. This is predominantly driven by global factors, which have been relevant for several months, but in some cases have also deteriorated. These include China’s zero Covid policy - which continues to disrupt manufacturing and global logistics, the Russian invasion of Ukraine - which has heightened concern around global supply at a time when stock levels had been declining for consecutive years, and persistent concerns around weather conditions - which could curtail the supply response and policy actions in response to surging prices in some major producing countries. This includes a ban on palm oil exports from Indonesia, which is the largest global exporter, that will drive already high vegetable oil prices up further, and India’s ban on wheat exports. Weather conditions in the USA have also delayed plantings of summer grains and oilseeds, which further supported price gains. These persistent increases in agricultural commodity prices globally have filtered into the South African market, supporting high prices amongst major grains and oilseeds, despite the expectation of another bumper crop, which should ease any concerns around availability and ensure that commodity prices continue to trade at export parity levels.


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