Food inflation is expected to start escalating towards the end of 2018, which will make it increasingly difficult for the majority of South African households to afford a balanced diet. According to the Bureau for Food and Agricultural Policy (BFAP), a range of tax factors are contributing to higher food prices.
After a wave of severe drought induced food inflation, South African consumers found some relief on the back of a rebound in crop production, with food inflation losing pace since the beginning of 2017. This was supported by low inflation and even disinflation in recent periods in bread and cereals, oils and fats, as well as fruit and vegetables. The sustained positive aggregate food inflation was, however, supported by dynamics in the meat sector. Red meat, specifically, although showing initial signs of recovery, is still experiencing the effects of the 2015/16 drought, further supported by relatively weak exchange rate levels, which in turn maintained attractive export opportunities.
In the first quarter of 2018, average meat prices were still exhibiting double-digit inflation. There is, however, a general consensus among analysts and industry experts that food inflation has bottomed out (at 3,5% in March 2018) and will begin an upward cycle supported by, inter alia, an array of tax factors that took effect on 1 April 2018. These include the increase in the VAT rate from 14% to 15% and a substantial increase in the fuel levy.
FISCAL CHANGES AND FOOD INFLATION
According to the year-on-year change in the different subcategories considered to calculate food inflation for April 2018, the rate of inflation for bread and cereals for that month was roughly -4%, meat was about 9%, milk, eggs and cheese just over 5%, fruit -8% and vegetables about 2,5%. At the time of compiling the outlook document, this was the only data available for the period following the implementation of new VAT legislation. Although it is difficult to attribute the increases exclusively to the range of tax changes, it does provide an indication of the effect of these policies on food inflation.
Esta historia es de la edición Farmer's Weekly 7 September 2018 de Farmer's Weekly.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición Farmer's Weekly 7 September 2018 de Farmer's Weekly.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
Syngenta Seedcare celebrates a decade of innovation
Syngenta's ambition is to enable their customers' investments to grow in healthy soil from treated seeds to young plants through innovation and collaboration, writes Magda du Toit.
Agri workers shine at Western Cape awards
Lindie-Alet van Staden, a garden and olive orchard manager at L’Ormarins Wine Estate in Franschhoek, was crowned as the Western Cape Prestige Agri-Worker of 2024 at a gala event recently held near Paarl.
Small and large farmers recognised at grain awards
The annual Grain SA/Syngenta awards ceremony bears testimony to the quality of farmers in the grain industry.
Growing partnerships: Fedgroup's flexible and innovative approach
Janine Ryan spoke to Warren Winchester, general manager of impact investing at Fedgroup, about why the company became involved in agriculture, and what it offers farmers and their immediate communities.
Why fish farms fail, and how to avoid becoming a statistic
The popularity of launching fish farms is not matched by their success. Leslie Ter Morshuizen, owner of Aquaculture Solutions, explores the factors that cause most of these businesses to go under.
Where history and modernity meet in a luxurious setting
Brian Berkman kept his eyes peeled for ghosts in the oldest continuously run hotel in South Africa, but all he found was a fabulous two-night stay.
THE HITCHING POST
I'm a stylish elderly lady with a radiant glow and a good sense of humour that keeps me young at heart.
Cutworms: check the weeds on your fields!
Zunel van Eeden explains why understanding the ecological interplay between cutworms and weeds is crucial for effective pest management. Producers should disrupt the life cycle of cutworms to minimise crop damage.
Does high-density grazing mimic grazing patterns of game?
In their paper on high-density grazing in Southern Africa, professors Angelinus Franke and Elmarie Kotzé from the Department of Soil, Crop and Climate Sciences at the University of the Free State say high-density grazing systems may not accurately reflect natural ecosystems. Roelof Bezuidenhout reports.
Global grain outlook: 2024/25 marketing season
In its latest summer crops report, the Crop Estimates Committee says South African farmers intend to plant 4,47 million hectares of summer grains and oilseeds in the 2024/25 season, up 1% from the previous season. As South Africa exports maize and soya bean, Annelie Coleman reports on the latest trends in the international grain and oilseed markets, amid fluctuations in weather conditions and ongoing armed conflicts.
