South Africa's food price inflation has remained close to its lowest level in over a decade, but analysts warn that the El Niño weather pattern is expected to bring below-normal rainfall and above-normal temperatures, risking a greater bearing on food price inflation next year. The country's agriculture department recently said El Niño conditions were expected to continue through the 2026/27 summer, contributing to crop failures, livestock losses, water restrictions, and higher production costs.
The latest figures from Stats SA show that annual consumer food price inflation accelerated to 0.7% in August from 0.6% in July, marking a shift from the sharp disinflation seen through much of 2026. The moderation in food prices has been driven largely by strong agricultural production during the 2025/26 season, particularly in grains. South Africa's summer grain and oil seed harvest is forecast at a record 21.6-million tonnes, 5% higher than the 2024/25 season.
The abundance of grain supplies has kept prices under pressure, with cereal products remaining in deflation in August. White rice was 10.8% cheaper than a year earlier, while fruit and vegetable prices also remained below year-earlier levels. Fruit production has remained relatively strong despite flooding in parts of the Eastern Cape and Western Cape, while production conditions for vegetables have remained broadly favourable, according to Agbiz.
Meat prices have also contributed to the moderation, with meat inflation slowing as cattle slaughtering has continued. However, foot-and-mouth disease remains a risk to red meat prices. Stats SA's latest figures show a mixed picture: beef remained in deflation, while pork prices continued to rise. Stewing beef was 5.3% cheaper in August than a year earlier, steak was 3.9% cheaper, and mince was 3.8% cheaper.
Not all food prices are falling, however. Fish and seafood inflation accelerated to 7.5% in August from 6.6% in July, while milk, dairy products, and eggs rose to 2.1% from 1.9%. Hake was 12% more expensive than a year earlier, while frozen fish fingers increased 11.3%. The broader inflation picture also shows food is currently providing some relief while other costs remain elevated.
Headline inflation increased to 4.4% in August from 4.3% in July, with housing and utilities and transport among the largest contributors. Transport inflation was 8.8%, while fuel remained 20% more expensive than a year earlier despite prices falling during August. This creates a particular risk for food prices because South Africa relies heavily on road freight to move food around the country.
Agbiz chief economist Wandile Sihlobo expects the weather risk to have a greater bearing on food price inflation next year than on the remainder of this year. The next crop will be planted from about mid-October and is expected to reach the market around the middle of 2027.
Key points
- El Niño weather pattern threatens crop failures and higher production costs.
- South Africa's summer grain and oil seed harvest is forecast at a record 21.6-million tonnes.
- Food price inflation is expected to remain at relatively low levels for the remainder of 2026, but risks are building for 2027.
