Latest news with #Sihlobo
Daily Maverick
23-07-2025
- Business
- Daily Maverick
CPI inches up to 3% as meat prices continue to push up food inflation
South Africa's inflation inched up to 3% in June while meat and vegetable prices added strain to household budgets. South Africa's consumer price index (CPI) accelerated to a 3% year-on-year increase in June, up from 2.8% in May. While the increase is modest and still comfortably at the rock bottom end of the South African Reserve Bank's (SARB) 3% to 6% target range, it underscores the strain of rising food prices, especially meat. This marks the first increase after two months of stability and comes ahead of the SARB's Monetary Policy Committee (MPC) meeting on 31 July 2025, where the prospect of a rate cut remains in focus. Food costs climb Food prices climbed to a 4.7% year-on-year increase in June, up from a 4.4% increase in May. 'Meat — particularly beef — continues to be the main driver of food inflation. Beef prices spiked for a third successive month, with high annual and monthly increases recorded for stewing beef, mince and steak,' Statistics South Africa (Stats SA) said. Stewing beef prices alone rose by an annual 21.2%, the fastest pace on record since the current CPI series began in January 2017. Why are meat prices so high? Wandile Sihlobo, chief economist at the Agricultural Business Chamber, said the surge was driven by two shocks, both easing now. First, an avian flu outbreak in Brazil led South Africa to halt poultry imports from that country, causing panic in the market, he said. Those restrictions had since been lifted, and imports should recover soon. Second, an outbreak of foot-and-mouth disease hit South Africa's beef sector, triggering concerns about supply and panic buying, Sihlobo noted. 'Slaughtering has now resumed in the major feedlots, and we are seeing some easing in red meat prices, which should be reflected in the inflation figures of the coming months.' He added that temporary export restrictions during disease outbreaks eventually increased domestic meat supply, which should further ease prices. Fruits and vegetables also climb Other food categories also saw steep increases, with fruits and nuts up 13.2% and vegetables up 13.6% annually for the second consecutive month. Items such as beetroot, lettuce and carrots saw sharp price increases, while peanuts were slightly cheaper. 'We also view the recent increases in vegetable prices as a temporary blip due to weather issues, and expect supplies of various vegetable products to recover significantly in the second half of the year,' Sihlobo said. Some relief in the trolley Not everything is pricier. Cereal prices cooled in June, helped by cheaper white rice and hot cereals. Dairy also provided some relief. 'Several dairy products are also cheaper than a year ago. Lower prices were recorded for fresh full-cream milk, fresh low-fat milk and eggs,' Stats SA said. Even maize meal, a staple that has seen persistent increases, slowed to a monthly change of 0.4% in June, the lowest since November 2024. Fuel keeps a lid on inflation According to Stats SA, fuel is on average 11.2% cheaper than a year ago. Although still significant, this decline is less steep than May's 14.9% year-on-year drop. 'The fuel price fell by a marginal 5c per litre, essentially not contributing to the inflation outcome, and supporting the low nature of inflation in the second quarter of the year, along with weak economic demand,' Annabel Bishop, the chief economist at Investec, said in a CPI update. The transport category shaved 0.5 percentage points off headline CPI in June, said Stats SA, offsetting some of the upwards pressure from the food category. What this means for you Rising meat prices are making weekend braais more expensive, although this may change in the months ahead. Higher prices for staples like carrots and lettuce are stretching grocery budgets. Cheaper milk, eggs and cereal provide a small offset. If the SARB cuts interest rates, loan and credit repayments could get cheaper. Prices are rising at a slower pace than last year, meaning wages may stretch further. Food price increases are anticipated to be temporary, so as local supply improves, expect some easing in the coming months. How inflation hits your budget For now, inflation remains low by historical standards, but rising food and meat prices are hitting household budgets. With inflation still at the lower end of the SARB's range, economists argue that the bank has room to cut rates. 'Such low inflation provides considerable support for consumers given that most wage increases are higher than this low prevailing rate of inflation. It also, arguably, supports the case for the Reserve Bank to cut interest rates further,' said Dr Elna Moolman, Standard Bank's head of macroeconomic research in South Africa. Relief ahead for food prices Despite the June spike, the trend of rising food prices looks set to moderate. 'We expect food price inflation to moderate in the coming months, as the benefits of ample domestic grains and an expected decent fruit harvest continue to enter the market. We also believe that the worries about meat prices will ease soon as supplies recover,' Sihlobo said. Investec forecasts CPI climbing slightly in the second half of the year due to base effects, potentially reaching 4% by year's end, but still 'reasonably benign'. The bank expects at least one more rate cut this year and possibly another in 2026. DM
The South African
15-07-2025
- Business
- The South African
South Africa can sip more Brazilian coffee, says expert
Agricultural economist Wandile Sihlobo believes that the rising global coffee prices, driven by poor weather in Vietnam and Brazil and new US tariffs on Brazilian coffee, are reshaping trade dynamics. While American consumers brace for costlier brews, South Africa, which imports nearly 24 000 tonnes of coffee annually (mostly from Brazil and Vietnam), may stand to benefit, according to Sihlobo. Brazil, already the world's top coffee producer, could increase exports to South Africa if it offers better quality and prices. 'I know our domestic tea and coffee producers won't like me saying this,' says Sihlobo. 'But hey, we have a decent demand for coffee (just like we do with other ' substantive beverages ' like whiskies, where we spend over US$300 million on imports annually).' In light of this, The South African website compared coffee prices across 10 of South Africa's most popular coffee chains. The comparison highlights just how much consumers are paying for their caffeine fix. For the comparison, we looked at the price of a 'tall' Americano, Caffe Latte and Cappuccino. Listed in alphabetical company order Company Americano Caffe Latte Cappuccino Bean Tree Cafe R55.50 R49.50 R45 Bootlegger R37 R42 R43 McCafé R27.50 R33.60 R32.30 Mugg & Bean R39 R45 R40 Seattle Coffee Company R30 R33.50 R33.50 Starbucks R38 R45 R45 Vida e Caffè R39 R46 R43 W Cafe R34 R41 R41 Wild Bean Cafe R29.88 R47.88 R45.88 Wimpy R36.90 R44.90 R42.90 NOTE: The prices above were taken from the individual coffee shop and cafe's website or online research and were accurate at the time of publishing. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
IOL News
26-06-2025
- Business
- IOL News
Impact of foot-and-mouth disease on meat prices creates concern among consumers
A customer browses the meat and poultry section. Food prices in South Africa rose to 4.4% in April from 3.3% in March, largely driven by meat, specifically beef, due to the outbreak of foot-and-mouth disease. Image: Bloomberg The Agricultural Business Chamber (Agbiz) and civil society groups have raised concern about rising prices of food in South Africa, largely driven by meat, specifically beef, due to the outbreak of foot-and-mouth disease. Data from Statistics South Africa (Stats SA) last week showed that food inflation increased to 4.4% in May from 3.3% in April, despite the headline consumer inflation remaining unchanged at 2.8%. Wandile Sihlobo, chief economist of Agbiz, acknowledged the acceleration of food price inflation but offered a note of cautious optimism. Sihlobo also noted that other products remained roughly unchanged while others experienced slowing price inflation. 'Regarding meat, the key issues that have dominated the headlines are the outbreak of avian influenza in Brazil and its potential impact on domestic poultry supplies and prices. The second concern relates to beef supplies following the outbreak of foot-and-mouth disease,' he said. 'The price increases we observe are essentially a continuation of the past few months, mainly due to base effects, the rising domestic demand, and the suppliers' window to pass on some costs they have experienced stemming from higher feed prices over the past couple of months before the recent cooling of maize and soybean prices.' Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ The Pietermaritzburg Economic Justice and Dignity Group (PMBEJD) conducts a monthly assessment on 44 basic food items as part of the Household Affordability Index. Mervyn Abrahams, director of the PMBEJD, said they noted that 33 out of the 44 items recorded an increase, with onions up by an alarming 23% when compared to the April index. 'Aside from onions, we also noted that items like potatoes, spinach, butternut, and margarine also recorded increases, which is equally worrying as these are products used on a regular basis in households across the countrym' he said. Abrahams these were difficult times where most people and families were struggling to make ends meet in what was an illustration of high living costs, meaning that access to food was becoming more difficult on a regular basis. 'Middle-income earners, as well as those in the low-income category, constitute a major portion of the country's population, and when studies and reports indicate that they are battling to make ends meet, that provides a worrying state of affairs in the country.' Evashnee Naidu, regional manager for Black Sash in KwaZulu-Natal, noted with concern the upward tick in food price inflation. Naidu said despite the annual increase in social grants, this continued to be eroded due to food price inflation. 'Those who are on social grants or on lower income thresholds severely bear the brunt of the ongoing increase in food prices. Food insecurity continues to plague South Africa, with seemingly no resolution in sight,' Naidu said. 'Government has to do more to curb ever-increasing food price inflation, and one of the measures could be making the Social Relief of Distress (SRD) grant a permanent form of Basic Income Support to those aged 18-59 years to ensure that individuals and households have some kind of safety net to cushion the blows of increasing prices in South Africa and ensuring that people have some kind of food security.' Aliya Chikte, project manager at the Alternative Information and Development Centre (AIDC), said more than half the population lives in poverty, leaving the majority without daily access to nutritious food. 'While this has been a persistent issue, the rising cost of healthy protein sources is particularly alarming, especially amid the growing prevalence of non-communicable diseases in the country,' she said. Chikte also said the continued exclusions from the SRD grant, along with anticipated increases in false exclusions of other social grants, was compounding the crisis and will deepen hunger. 'We are particularly concerned about the planned stringent criteria being applied to the Child Support Grant.' BUSINESS REPORT
Daily Maverick
19-06-2025
- Politics
- Daily Maverick
Loaded for Bear: Sihlobo peels off the gloves and busts SA agriculture myths in new book
This book weeds out many of the myths about the platteland — myths sprung from the manure spread by self-serving politicians that can find fertile soil in the withered fields of disillusion. In his previous two books about South African agriculture, the affable Wandile Sihlobo generally took a diplomatic tone when it came to government failures and half-baked policies. But Sihlobo, the chief economist at the Agricultural Business Chamber of South Africa (Agbiz), has taken the gloves off in his latest book, co-authored with Johann Kirsten, Director of the Bureau for Economic Research at Stellenbosch University. The Uncomfortable Truth about South Africa's Agriculture takes aim at decades of government bungling, missteps, corruption and ill-conceived policies that have squandered the promise of land reform, a process that is crucial for food security, economic growth and the rectifying of glaring economic imbalances rooted in apartheid. This book also weeds out many of the myths about the platteland — myths sprung from the manure spread by self-serving and populist politicians that can find fertile soil in the withered fields of disillusion. Among the domestic challenges confronting South African agriculture, Sihlobo and Kirsten are scathing in their assessment. 'A malfunctioning State Veterinary Service is unable to prevent and manage disease outbreaks and unable to comply with requirements of trade partners,' they note — an issue that has been thrown into sharp relief by the recent outbreak of foot-and-mouth disease among livestock. They also point to the 'complete destruction of the rural road and rail system' and 'dysfunctional local municipalities resulting in no service delivery'. Not 'poor' service delivery — 'no' service delivery. The rural road and rail system is not just coming off the rails but has collapsed into 'complete destruction'. The state vet service is 'malfunctioning'. This is no mincing of words and is a grim but accurate reflection of the unfolding disaster of government breakdowns and the bitter harvest they are reaping in the agricultural sector. Still, against the odds and in the face of other challenges such as climate change, agriculture in South Africa is in many ways thriving. This crisp and concise book is not all doom and gloom and offers a number of sensible policy recommendations. Myth-busters The book busts many of the myths around South African agriculture that have ripened on the vines of state failure. First off is the widely held perception that 40,000 white farmers own 80% of South Africa's land. 'The magic number of 40,122 commercial farmers is widely quoted as the total number of farmers earning a commercial income from farming. The number comes from the 2017 census of commercial agriculture, but is based only on farmers registered for value-added tax (VAT),' the authors write. 'The 2017 census excludes 92,634 households that practise commercial farming as their main source of income, and a further 109,465 households that practise commercial farming as a secondary source of income. So, in total, there are 242,221 households (black and white) in South Africa that practise some form of commercial farming.' And in 1994, white commercial farmers owned 63% of the total surface area of the country. That's a lot, but it's not 80% and has since declined. Another myth is that commercial agriculture is characterised by large-scale white commercial farmers. 'This myth results from a misinterpretation of the concept of 'commercial' and 'scale'. Commercial agricultural production indicates production beyond subsistence needs, with some, or a major share, of the total production sold to the market,' the book says. And unlike fishing, size does not always matter. 'Land size is not a good indication of the scale of the farming operation. For example, a small irrigation farm of 10ha can deliver millions in turnover, while a 10,000ha Karoo farm with extensive grazing is unlikely to exceed R1-million in turnover per annum.' The big myth centres on land reform and the mantra that only 8% of farmland has been redistributed to black people. I have been covering such issues for years, and the 8% figure has been thrown around now for mor3 than a decade, seemingly stuck in an endless time loop. 'These arguments typically ignore the statistics on the land market… and the fact that black South Africans have been acquiring farmland on their own. Taking account of all the pillars of the land reform programme, it is estimated that 25% of all farmland has been redistributed or land rights have been restored,' the authors assert. This is also close to the 30% goal by 2030. But '… the incorrect presentation of progress with the land reform process is… maliciously used to inflate the argument for expropriation', the authors pointedly note. It is all fodder for the populist and authoritarian MK and EFF parties and the radicals within the ANC's fold. 'These arguments also conveniently ignore the bureaucratic inefficiencies in the government land reform programme, and the many cases of patronage and corruption in the programme that derailed the noble idea of assisting the rightful beneficiaries to acquire land in the market.' The bottom line is that the state is now one of the biggest owners of farmland in South Africa, but much of it lies fallow and weed-strewn. 'There are vast tracts of land in the government books that could be transferred to black South Africans… for the benefit of agricultural progress and land reform success. To date, the process has not been transparent and many of the allocated parcels of agricultural land remain unproductive.' Disappointing The programme under the Proactive Land Acquisition Strategy (Plas) has been disappointing, the authors note, because '… virtually no land has been transferred to individuals'. 'The performance on most Plas farms is disappointing. More than half of the current beneficiaries aren't doing any substantial agricultural production, and the same number were evaluated as having a low capacity to achieve commercial status.' A poor beneficiary selection process — you are either a farmer or you are a cadre — inadequate support, poor infrastructure, a lack of access to the finance that comes with ownership, and rampant crime have dashed the promise of Plas. Among the sensible policies proposed to kick-start aspiring black farmers and bring land back to productive use is the transfer of title deeds to capable farmers to enable them to access finance through a reinvigorated Land Bank. The Land Bank itself should be focused squarely on mortgage finance for land purchases and wholesale finance for production credit, its cost of capital should be below prevailing market rates set by the Reserve Bank, and its funding models need revision. There is a lot more cud to chew in this book, which lays bare many of the uncomfortable truths about South African agriculture while charting a way forward. DM
IOL News
18-06-2025
- Business
- IOL News
Agribusiness Confidence Index shows slight decline amid global uncertainties
Agricultural Business Chamber said that despite the slight decline, the current level of the ACI, implies that South African agribusinesses remain optimistic about business conditions in the country Image: Supplied South Africa's Agricultural Business Confidence Index (ACI) edged down by five points to 65 in the second quarter, reflecting a slight dip in sentiment across the agribusiness sector, the Agricultural Business Chamber (Agbiz) said on Wednesday. The chamber noted that concerns over global trade uncertainty, persistent geopolitical tensions, and ongoing domestic animal disease outbreaks were among the main factors weighing on industry confidence. "Despite the slight decline, the current level of the ACI, implies that South African agribusinesses remain optimistic about business conditions in the country," said Wandile Sihlobo, the chief economist at Agbiz. 'The better summer rains and improvements at the ports which have enabled exports with minimal interruptions, are some of the positives. This survey was conducted in the second week of June, covering various agribusinesses operating in all agricultural subsectors across South Africa." The ACI comprises ten subindices; six of them declined in quarter two, while the rest remained unchanged. The turnover subindex confidence was down by 5 points to 55. There was a deterioration in sentiment among agribusinesses operating in the red meat sector, while others maintained a roughly unchanged view from the previous quarter. Similarly, the net operating income subindex fell by 5 points to 65 points. The drivers were the same as the turnover. The sub-index measuring export sentiment volume fell by 40 points to 60. Sihlobo said, 'This is still a relatively favourable level. For example, in quarter one, South Africa's agricultural exports totalled $3.36 billion (R54 billion), up 10% from the same period a year ago, according to data from Trade Map. Thus, the decline in sentiment in quarter two is a normalisation.' The general economic conditions subindex fell by 15 points to 50 in quarter two. "This indicates concerns about growth prospects this year due to both domestic and global constraints. The market share of the agribusiness subindex fell by 5 to 65 points in quarter two," Sihlobo said. "Most respondents maintained an essentially unchanged view, which enabled the high base to lead to a mild decline in sentiment.' Sihlobo said the second-quarter ACI results for 2025 reflect an overall optimistic sentiment in the agricultural sector, with expectations of a recovery continuing through the year. However, he cautioned that the rebound is likely to be uneven, as certain key subsectors remain under pressure from ongoing animal disease outbreaks. 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Advertisement Next Stay Close ✕ "The dominance of geopolitical concerns amongst respondents' views illustrates South Africa's agricultural sector's strong dependence on export markets and the need to work to diversify markets," Sihlobo noted. 'China, India, Saudi Arabia, and Egypt are among the key markets we should expand into.' Francois Rossouw, the CEO of Southern African Agri Initiative (Saai), said the slight decline in the ACI is understandable given the pressures facing the sector. 'While confidence remains in positive territory, ongoing threats like foot-and-mouth disease, amongst others, continue to weigh heavily on the red meat industry. Globally, escalating geopolitical tensions and uncertainty over key trade relationships- especially with major partners like the United States, raise concerns for export-driven agribusinesses," he said. These dynamics, alongside regional conflicts in Ukraine and the Middle East create planning difficulties for producers. 'While confidence remains resilient overall, strengthening biosecurity and maintaining stable, trade-friendly diplomacy will be essential to support continued recovery,' Rossouw said. TLU SA general manager, Bennie van Zyl, is in agreement with most of the findings of ACI by Agbiz. 'It must be noted that the agricultural sector is in a fluctuation of seasonal realities especially with rain. Some years we have better rain , some years we have late rain and some years we have no rain," Van Zyl said, "This is something that has a huge influence on the climatic side of the agricultural sector. There's also the impact of crime on the agriculture sector such as produce theft and theft of cattle which is stock theft.'
