Agri industry welcomes food inflation cooling to 5.2% as outlook brightens

The Agricultural Business Chamber of South Africa (Agbiz) has welcomed the easing of food inflation as South Africa's consumer price index for food has declined to 5.2% in August 2025 from 5.5% the previous month, according to recent data released by Statistics South Africa (Stats SA).

Wandile Sihlobo, chief economist at Agbiz, said the easing marks the first slowdown after six consecutive months of rising food prices. He noted that cereals, fruit, nuts, and vegetables were the main drivers of the moderation, supported by South Africa’s abundant harvests.

However, Sihlobo said a key product that many are watching is meat, which has remained elevated, although slaughtering has resumed in major feedlots across the country.

“Initially, panic buying, not necessarily a shortage of product, was the main driver of meat prices. The fact that while the supply has improved somewhat, the prices remain elevated illustrates that consumer demand may be slightly more buoyant and able to contend with the current higher prices, to an extent,” he said.

Sihlobo said that there may also be a slight delay in price adjustments at the retail level.

South Africa’s 2024/25 summer grains and oilseed harvest is estimated at 19.55 million tonnes — a 26% increase year-on-year — thanks to favourable summer rains and expanded planting. Ample harvests of fruits and vegetables have also helped ease upward price pressures.

Sihlobo said that regarding the meat price upside pressures, the driver has initially been two significant factors, which have now somewhat eased.

“First, the outbreak of avian influenza in Brazil led to South Africa temporarily restricting the imports of poultry products from Brazil, causing panic in the market. However, the restrictions have now been lifted, and imports are recovering.”

Sihlobo added that second, South Africa experienced an outbreak of foot-and-mouth disease, which led to concerns about red meat supplies and some panic buying, thus pushing up prices.

“Slaughtering has now resumed in the major feedlots, although foot and mouth remains an issue. When outbreaks of disease occur, South Africa is temporarily restricted from various export markets, which over time increases the supply of red meat into the local market. South Africa's headline CPI was 3.3% in August 2025, from 3.5% in the previous month.”

Abigail Moyo, spokesperson of the trade union UASA, welcomed the drop in the Consumer Price Index (CPI) from 3.5% in July to 3.3% in August.

“Despite ongoing economic challenges that contribute to high living costs for consumers, we remain optimistic that a positive outlook for consumers will emerge before the year ends,” she said.

Moyo added that the recent positive growth recorded in the Gross Domestic Product (GDP), despite the impact of US import tariffs and Eskom electricity tariffs implemented in April, along with a persistently high unemployment rate and numerous company closures, highlighted the resilience of the economy in the face of significant disruptions.

“While the inflation rate is still slightly above the SA Reserve Bank’s target range of 3%, we are hopeful that the Monetary Policy Committee will take into account the favourable trends in GDP, the inflation rate, and decreasing fuel prices, all of which benefit consumer spending, when considering a potential interest rate cuts in future.”

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