by AKANI CHAUKE
JOHANNESBURG, (CAJ News) – SOUTH Africa’s consumer food inflation is projected to slow throughout the year into 2024 renewed risks in global agriculture.
The risks include India’s decision to ban specific categories of rice exports and the termination of the Black Sea Grain Deal Initiative by Russia that facilitated grains and oilseeds exports from Ukraine.
Domestically, there are increases in fuel prices.
The Agricultural Business Chamber expressed optimism despite the challenges.
“Our view of the path forward remains unchanged from what we communicated last month,” Agbiz chief economist, Wandile Sihlobo, said.
“The products that could underpin the slowing food inflation trend will likely remain similar to those in the past few months,” the economist added.
Notably, red meat prices, which have softened at the farm level, should continue on this trend at the retail level in the coming months.
Fruit and vegetable prices are forecast to remain relatively affordable because of improved domestic supplies.
“We may, however, see temporary blips in the prices of products such as potatoes due to seasonality,” Sihlobo however said.
There had been fears that the “oils and fats” products prices would start to increase and follow the global price trend, which showed an uptick in July. But the recent data from the Food and Agricultural Organisation shows a retraction.
For example, in August 2023, the FAO’s vegetable oil price index was at 126 points, down 3 percent from July 2023 and 23 percent year on year.
The decline in the global prices of palm, sunflower, soybean and canola oils underpinned this.
Also crucial for the food inflation outlook going into 2024 is highlighting that El Nino’s forecast in the upcoming 2023/24 summer crop season is another aspect to keep an eye on.
“Although, we remain optimistic that it will have a mild impact on the sector and thus keep production at decent levels and, by extension, sustain moderating food prices,” Sihlobo said.
– CAJ News