The latest update on South Africa’s consumer price inflation (CPI) shows a mixed trend for fresh produce commodities with fruits remaining in negative territory for the 11th consecutive month while vegetables were on the upside but still decelerating during March 2022.
According to Statistics South Africa (StatsSA), the overall March 2022 consumer price inflation print accelerated by 1% month-on-month (m/m) and was 5.9% year-on-year (y/y). Its food subcomponent however was unchanged at 0.7% m/m and although still elevated ab8ove the upper end of the South African Reserve Bank’s overall CPI target (3% 6%), it decelerated to 6.2% y/y as the spill over global price pressures continued to influence local market conditions.
The CPI for fruits fell by 1.3% m/m and 0.7% y/y in March 2022 as the increased availability placed downward pressure on prices. A further analysis of the data reflects decreases across most commodities with oranges, bananas, apples, pears, paw paw, and pineapple prices falling by 1.2%, 5.8%, 1.8%, 6.8%, 24.2%, and 6.0% respectively y/y at R29.27/kg, R17.50/kg, R16.61/kg, and R20.28/kg.
Avocados were the only exception with prices increasing sharply by 29.5% y/y but still down by 23.4% m/m at R13.90/kg.
Senior Agricultural Economist at FNB Paul Makube said their analysis of the latest trends on the fresh produce markets shows a continued downside for fruit prices during April 2022.
He said about 63% of the major fruit commodities tracked showed declines of 2% to 12% y/y during the first four weeks of April led by bananas which fell by 12% y/y but still up by 5% m/m at R13.11/kg.
“Average fruit prices for the YTD showed a similar trend with decreases of 11%, 10%, and 8% respectively for avocados, bananas, and oranges at R25.54/kg, R8.01/kg, and R8.70/kg. At this rate, we can expect the fruit CPI to continue trending in negative territory y/y in the next update. In the vegetable category, its CPI declined by 0.4% m/m and decelerated further to 2.8% y/y from 6.7% and 8.6% respectively y/y in February and January 2022.”
Maybe said a drill-down into the vegetable CPI data shows the biggest increase in pumpkin prices which were up 4.9% m/m and 58.7% y/y at R15.43/kg.
Other big-ticket items in the vegetable CPI basket mainly cabbage, onions, and potatoes posted modest increases of 6.7%, 4.3%, and 3.9% respectively y/y R17.62/kg, R15.19/kg, and R13.64/kg. Tomatoes however surprised on the downside and fell by 6.8% m/m and 10.6% y/y at R25.06/kg.
“At producer level, the analysis of prices on fresh produce markets shows declines across most vegetable commodities under review. “The biggest decrease was for tomatoes which fell by 48% y/y although having jumped 15% m/m at R8.98/kg. The average price of tomatoes for the year to the week ending 22 April 2022 (YTD) is however 11.4% lower relative to the same period in 2021. After a weak start early in 2022 due to inclement weather, tomato volumes rebounded strongly on markets and helped maintain downward pressure on prices in April relative to the same period last year.”
Other vegetable commodities that recorded losses included cabbage with prices falling by 1.8% m/m and a whopping 24.5% y/y at R3.12/kg. “They were followed closely by butternuts with decreases of 1.6% m/m and 15.1% y/y at R3.95/kg. Nonetheless, the average weekly butternuts prices for the year to the week ending 22 April 2022 reached R4.20/kg which is almost 50% higher relative to the same period in 2021.”
He said carrots prices averaged R 5.06/kg which is down 12.8% y/y although having rebounded strongly by 20.0% m/m. The average weekly carrot prices for the year to the week ending 22 April 2022 reached R3.76/kg which is 28% lower relative to the same period in 2021.
Indications are that the weakness in fresh produce prices so far during April 2022 could have provided some benefit for consumers.
“Our expectations are that CPI for vegetable will decelerate further while fruits remain in negative territory in the May update.”