Food and beverages inflation falls to lowest level in 14 months
Annual food and beverages inflation fell to 8.7% year-on-year in March, but the good news may be short-lived as downgrades threaten agribusiness
SA’s annual food and beverages inflation fell to 8.7% year-on-year in March, its the lowest level in 14 months. Data from Stats SA show that food and non-alcoholic beverages inflation dropped from 9.9% in February 2017. According to the Agriculture Business Chamber (Agbiz), which represents commercial farmers and agribusiness enterprises nationally, the general decline in food inflation is largely on the back of a broad recovery in agricultural production. "Although there are lag effects between the decline in agricultural commodity prices and retail food prices, the benefits of the up-tick in agricultural production are already reflected in food prices," said Wandile Sihlobo, head of economic and agribusiness research at Agbiz. However, the good news is likely to be short-lived. Agbiz warned recently that the decision by S&P Global Ratings and Fitch to downgrade SA’s sovereign debt to junk status was likely to hurt agribusiness and consumers might have to pay more for food in the m...
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