INFLATION
WANDILE SIHLOBO: Promise of rain bodes well for food-price inflation
Although food and nonalcoholic beverages inflation decelerated to 5.7% year on year in August — its lowest level since November 2015 — the average hides wide disparities in the basket. For instance, meat recorded a 15% year-on-year increase, its highest inflation level since December 2011. Meat has a relatively high weighting of 5.46% in the headline consumer price index basket, which means it accounts for about a third of the food and nonalcoholic beverages basket. The recent uptick in meat price inflation can largely be explained by two factors — the restocking process in the livestock sector after the 2015-16 El Niño-induced drought, and then there is the spread of avian flu in the poultry industry. From a livestock perspective, the most recent data from the Red Meat Levy Admin show that South African farmers slaughtered 203,647 head of cattle in July, 13% fewer than the corresponding period in 2016. Beef alone accounts for about 8% of the food and nonalcoholic beverages inflatio...
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