Food and non-alcoholic beverages inflation remain unchanged in June 2018 at 3.4% y/y

South Africa’s food and non-alcoholic beverages inflation remain unchanged in June 2018 at 3.4% y/y.

• Keeping inflation at fairly lower levels are bread and cereals (-3.1% y/y), fruit (-3.2% y/y), oil and fats (-1.2%), sugar, sweets and desserts (-5.3% y/y), which are still in deflation. This is underpinned by the large agricultural output from the previous and current season which have moderated agricultural commodity prices.
• Meat price inflation, which has been rising in the past couple of months, also decelerated to 6.8% y/y in June, from 7.8% y/y in May. This is partially driven by the uptick in cattle slaughtering activity. South African farmers slaughtered 219 434 head of cattle in May 2018, up by 11% from the previous month, according to data from the Red Meat Levy Admin.
• In the near to medium term, we expect food price inflation to remain at relatively lower levels due to large agricultural output.

Figure 1: South Africa’s food and non-alcoholic beverages inflation (per product)