Yikes, consumer price inflation rises for third month in a row as food costs soar

Annual consumer price inflation (CPI) has increased for a third consecutive month, and is now verging on the upper limit of the South African Reserve Bank’s inflation target range.

This is a worrying figure considering the Monetary Policy Committee (MPC) meets tomorrow to deliberate the final repo rate decision of 2023.

Stats SA data released on Wednesday reveals that annual inflation has risen from 5.4 percent in September to 5.9 percent last month while, monthly, consumer prices have gone up by 0.9 percent, the highest monthly rise in three months.

The prices of potatoes and eggs, in particular, have gone up drastically over the past year, with increases of 64.6 percent and 24.4 percent respectively; rice and banana prices have climbed by 20.8 percent and 33 percent respectively.

The following categories recorded annual inflation rates above 6.0 percent in October:

– Food and non-alcoholic beverages – 8.7 percent

– Transport – 7.4 percent

– Health – 6.4 percent,

– Restaurants and hotels – 6.3 percent

For the second consecutive month, food and non-alcoholic beverages (NAB) prices accelerated upwards, rising to 8.7 percent in October from 8.1 percent in September and 8.0 percent in August. The 1.5 percent monthly increase was the highest since January this year, Stats SA says.

Food price changes: October 2022 vs October 2023

PRICE DROPS

– Bread and cereals – 0.4 percent cheaper

– Maize meal – 1.3 percent cheaper

– Meat – 0.4 percent cheaper

PRICE HIKES

– Potatoes – 64.6 percent more expensive

– Bananas – 33 percent more expensive

– Vegetables – 23.6 percent more expensive

– Rice – 20.8 percent more expensive

– Sweet potatoes – 16.4 percent more expensive

– Tomatoes – 15.2 percent more expensive

– Pumpkin – 11.1 percent more expensive

Stats SA reports that prices for poultry-related products, including eggs, have come under increased upward pressure due to the outbreak of avian flu. The culling of millions of chickens resulted in market shortages and panic buying from anxious consumers.

“Interestingly, price increases vary across the country. Western Cape consumers felt the most pain, with a tray of six eggs rising by R6,42 from an average price of R17,71 in October 2022 to R24,13 in October 2023. Gauteng consumers had to fork out an additional R4,81 over the same period. At an average price of R24,32, a tray of six eggs was the most expensive in Gauteng during October.”

Of the seven provinces surveyed, Free State bucked the trend, with the average price for a tray of six eggs dropping from R19,33 in October 2022 to R18,38 in October 2023.