In the latest consumer price index (CPI) released by Statistics South Africa (Stats SA) on February 16, headline inflation decelerated to 5.7% year-on-year (y/y) in January 2022 from 5.9% y/y in December 2021.
Senior Agricultural Economist at FNB Mr Paul Makube said this is a slight pull back after almost breaching the upper end of the Reserve Bank’s target range (3%-6%).
“Gains in the food and non-alcoholic beverages, housing and utilities, transport, and the miscellaneous goods and services underpinned the upside in the CPI outcome.”
Makube said the January 2022 food CPI increased by 6.2% y/y from 5.9% y/y during the month earlier underpinned by the strength in prices of fish, oils and fats, and vegetables .
“The vegetable CPI jumped 8.6% y/y and 3.4% month-on-month (m/m) due to the contraction in supplies as heavy rains battered crops, causing flooding conditions, and hampering farming operations. Of the few vegetable commodities analysed, pumpkins, tomato, and cabbage prices at consumer level posted the biggest increases of 30.3%, 24.2%, and 17.9% respectively y/y at R14.68/kg, R24.76/kg, and R16.90/kg.”
Fruit inflation however surprised on the downside with a further decrease of 2% y/y and has remained in negative territory for the past nine months although having edged marginally higher m/m.
“The biggest losers were pineapples, apples, and oranges with decreases of 26.9%, 25.7%, and 20.6% respectively y/y at R16.19/kg, R15.12/kg, and 20.39/kg.
“On the local fresh produce markets, vegetable prices still show an uptrend with sharp gains in the average for the first two months of February 2022. The biggest gainers were tomatoes and butternuts with increases of 78.4% and 75.3% y/y at R4.19/kg and R13.76/kg respectively. However, carrots, potatoes, and lettuce prices declined by 43.8%, 18.2%, and 17.6% respectively y/y at R2.97/kg, R3.59/kg, and R12.94/kg on softer uptake towards mid-month.”
We however, said Makube, saw a mixed trend in the fruit market with 50% of the commodities tracked rebounding modestly relative to last year with mangoes at R12.86/kg which is 9% higher y/y. “Grapes, avocados, and bananas came in on the downside with sharp decreases of 14.9%, 14.2%, and 2.5% respectively y/y at R13.57/kg, R26.72/kg, and R7.69/kg (figure A4).”