Food prices drive inflation to 3% as beef costs hit record highs

Consumer inflation in South Africa rose to 3.0% in June, up from 2.8% in April and May, largely due to soaring food prices.

In a statement on Wednesday, Statistics South Africa reported a month-on-month increase in the consumer price index of 0.3%, highlighting ongoing pressures on household budgets.

Food prices have surged, with annual inflation for food and non-alcoholic beverages reaching a 15-month high of 5.1%. Beef prices, particularly for stewing beef and mince, are the primary contributors to this increase.

Statistics South Africa noted that stewing beef recorded a staggering 21.2% annual rise, marking the fastest growth since the Consumer Price Index series began in January 2017.

Other food items like fruits, vegetables, and certain staples also saw significant price hikes, with beetroot, lettuce, and carrots among those experiencing sharp annual increases. Interestingly, peanuts became cheaper during this period, offering a slight reprieve for consumers.

While food inflation accelerated, some categories experienced lower prices. White rice, hot cereals, and cold cereals all saw price drops, reducing the annual inflation rate for cereals.

Meanwhile, while maize meal remains high on an annual basis, its monthly increase of 0.4% in June was the lowest since November 2024.

Dairy products have also shown a mixed bag, with fresh milk and eggs becoming less expensive compared to last year. The dairy index recorded a slight annual decline of 0.5%, despite a recent monthly rise of 0.3%.

In the housing sector, the annual change for actual rentals increased from 2.9% in the first quarter to 3.0% in the second quarter, indicating steady demand in the rental market. Imputed rentals also saw a modest rise from 2.4% to 2.5%. Conversely, fuel prices continued to fall, dropping for the fourth consecutive month and averaging 11.2% cheaper than a year ago.

As consumers grapple with higher prices, the mixed signals in inflation data reflect a complex economic landscape. While some relief may be found in certain product categories, the ongoing rise in food costs remains a significant concern for South African households.

The path ahead for inflation will depend on various factors, including global commodity prices and local production levels.