Inflation in food and non-alcoholic beverages edged higher in August after eight-consecutive months of declines but the increase was modest, with Statistics SA cautioning against reading it as a significant shift in the food inflation trajectory.
The South African Reserve Bank's Monetary Policy Committee (MPC) raised the repo rate by 25 basis points to 7.25% on Wednesday, citing rising fuel prices, higher global interest rates and increased upside risks to inflation. The decision was unanimous and takes effect from Friday.
Stats SA said annual consumer inflation rose to 4.4% in August from 4.3% in July, while the consumer price index was unchanged month on month.
Food and non-alcoholic beverage (NAB) inflation increased to 1.1% from 0.9%, the first increase since November 2025 after eight consecutive months of declines.
The increase in the combined food and NAB category masks a more subdued picture for food alone. The Institute for Economic Justice (IEJ), analysing the Stats SA figures, said food inflation was 0.7% year on year and unchanged month-on-month, while non-alcoholic beverages rose 4.9% year-on-year.
Patrick Kelly, the chief director at Stats SA, said the increase reflected higher annual inflation rates across several food groups, including cereals, fish, cold beverages, dairy, fruit, nuts and vegetables.
"These are all increases in the overall inflation rate, so that contributes then to bumping up from the 0.9% to the 1.1%," Kelly said.
But he cautioned: "I wouldn't read too much into it right now that there's any significant shift in the kind of inflation trajectory for food and non-alcoholic beverages," he said. "I think 0.9% or 1.1% is pretty low levels of inflation."
Hake rose 12% year on year, frozen fish fingers 11.3% and battered or crumbed fish 9.4%, while pork rose 6.6% and ham and bacon 8.6%.
By contrast, stewing beef was 5.3% cheaper than a year earlier, steak 3.9% cheaper and mince 3.8% cheaper. White rice was 10.8% cheaper than a year ago, although its annual inflation rate became slightly less negative, moving from -11.6% to -10.8%.
"Cereals and meat are the two heftiest products within food and non-alcoholic beverages and so when they have low inflation levels, food overall will generally have low inflation," Kelly said.
Nicolaas van der Wath, a senior economist at the Bureau for Economic Research, said he regarded the increase in annual food inflation as largely a base effect rather than evidence of a broad monthly surge in food prices.
There were substantial differences between individual foods. Over the year to August, maize meal fell 11%, rice 9%, sugar beans 12%, samp 4%, cake flour 3% and eggs 3%.
But onions rose 36%, potatoes 9%, pilchards 11%, white bread 6%, frozen chicken portions 5%, maas 6%, sugar 4% and cooking oil 4%.
The basic nutritional food basket, a broader measure used by PMBEJD, cost R6 597.25 in August, down 1.9% from July but 2.1% higher than a year earlier.
The IEJ said the relatively slow growth in food inflation had helped cushion low and middle-income households but warned that low inflation should not be confused with affordability. It pointed to PMBEJD data showing that the cost of its 44-item food basket had increased by 45% since 2020.
"A low food inflation rate simply maintains budgetary and nutritional pressure on low-income households," it said, noting that food prices remained high despite their slower rate of increase.
The institute also warned that the aggregate food-inflation figure could obscure sharper increases in individual staples. Maize meal was one example, it said, because lower-income households can spend 10% to 15% of their household budget on it.
"An increase in the maize meal price above overall food inflation therefore has a disproportionate impact on low income households."
When staple foods take up more of a household's budget, it said, less money is available for nutrient-dense foods, forcing nutritional trade-offs.
Stats SA said annual transport inflation eased slightly in August, to 8.8% from 8.9% in July, mainly because annual fuel inflation eased to 20% from 20.6%. Petrol prices fell 2% between July and August, while diesel prices rose 3.1%.
"A 20% increase in fuel prices makes vitally everything more expensive, not just driving," the IEJ said, pointing to farming, freight, food processing and the movement of goods.
It noted that passenger transport services, including taxis and buses, had nevertheless risen 11.6% year on year. For households that depend on public transport, these costs could not be easily substituted.
While fuel inflation eased in August, the Reserve Bank said the global fuel price shock had intensified. Its near-term inflation forecasts were raised mainly because of higher fuel prices.
Petrol prices had begun rising again after moderating between June and August, with an average under-recovery of R2.83 a litre at the time of the MPC statement.
"A few months back, it seemed that the fuel price shock might be unwinding but now it has intensified," the bank said.
"These geopolitical events add up to a large, negative and persistent global supply shock, creating additional inflationary pressures."
The bank expects headline inflation to rise above 5% later this year and in early 2027 before slowing as the fuel shock recedes. It expects inflation to return to around 3% towards the end of 2027.
Despite the pressure from fuel, the Reserve Bank said food inflation was at its lowest since 2010.
"In contrast to fuel, inflation developments in food and core goods have been more favourable," it said, attributing this to strong harvests and a levelling-off in meat prices following the foot-and-mouth disease outbreak.
But the outlook carries a further climate risk. "We may start to see drought pressures from El Niño soon but for now agricultural conditions are broadly favourable," the Reserve Bank said.
Kelly said Stats SA did not forecast food inflation, but acknowledged that El Niño could become a longer-term risk.
"El Niño tends to create drought conditions in the country, which obviously has an impact on food production, which typically would lead to higher prices …. I guess the severity of that is still to be seen and exactly how it would balance out with other forces but looking a bit more long-term, that's a key factor to keep our eyes on."
The IEJ similarly warned that higher fuel and fertiliser costs, combined with El Niño conditions, could add to food price pressures in 2027.