Consumers in South Africa can expect to continue paying higher prices for groceries as the food inflation ticks up.

Data from Statistics South Africa (Stats SA) on Wednesday showed that inflation for food and non-alcoholic beverages (NAB) rose slightly by 0.2% to 2.5% in December, up from 2.3% in November, driven by meat and fruit.

On an annual basis, food and non-alcoholic beverages inflation edged up to 1.7% from 1.6% in December 2024 compared to December 2023, with processed food prices unchanged at 3.2% and those of unprocessed food rising.

This comes as the overall annual consumer price index (CPI) increased for a second consecutive month, rising from 2.9% in November to 3.0% in December.

Hannah de Nobrega, economist and quantitative analyst at Prescient Investment Management, said this uptick in the CPI can be attributed to seasonal increases in components such as food and non-alcoholic beverages in the short term.

“Over the medium term, food has been the main driver of headline inflation,” she said.

“The El Niño 5-7-year weather cycle typically brings increased rainfall, leading to mould and occasional crop flooding. This, in turn, causes higher fruit and vegetable prices. Food and transport inflation remain the most volatile contributors to the headline CPI basket.”

This comes as international agricultural food prices lifted by a hefty 6.4% month-on-month in December, with domestic food prices influenced by these global prices on import/export parity pricing.

However, Stats SA said the annual rate for bread and cereals remained steady at 3.7%.

The monthly rate was -0.2%, with several wheat-based products declining in price between November and December.

The price index for meat softened by 0.4% in the 12 months to December, representing the lowest annual rate since May 2019.

Products that registered the largest annual declines included sausages, pork and whole chicken.

“Several products were more expensive, however, including beef extract (up 5.1%), bacon (up 4.8%) and ham (up 4.2%),” said Stats SA.

“The price index for hot beverages rose by 13.5%, the highest annual rate among all food and NAB groups. Products in this category continued to witness sharp price increases,” it said.

“Instant coffee was 16.1% more expensive in December 2024 compared with December 2023. Other items experiencing hot inflation include black tea (up 14.2%), drinking chocolate (up 14.1%), ground coffee (up 8.0%), rooibos tea (up 7.8%) and cappuccino sachets (up 3.8%).”

Old Mutual Group chief economist, Johann Els, said food inflation is still up but at a much lower pace than a year ago in talking about December versus December.

“So food inflation will likely drift up during the course of the year as it's been very low. But very good rainfalls that we've seen in the May's growing area suggest that maize prices shouldn't go up significantly this year.

“Of course, food is always very difficult to forecast food inflation, food prices because of seasonality and weather patterns, droughts, floods, etc. But I do expect food inflation to drift up during the course of this year, so it's around 5% inflation by the end of 2025. That's a moderate updrift during the course of this year.”

Nedbank economist Johannes Khosa said food and fuel prices will continue to exert upward pressure on consumer inflation after food inflation benefited from falling global prices throughout 2024.

“Locally, certain food items will also rise off a lower base, particularly those impacted by animal diseases, power disruptions, and logistical constraints,” Khosa said.

“Even so, the upside in food inflation will partly be contained by healthy summer crops, which should benefit from good rains over the past two months.”

BUSINESS REPORT