Latest news with #WandileSihlobo
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
15-07-2025
- Business
- IOL News
Limited progress in South Africa's release of government-owned land: what it means for development
A file picture showing a KwaZulu-Natal North Coast sugarcane farm. Beneficiaries of a settled land claim for prime land in KwaDukuza were yet to benefit from the property due to disputes. Image: Karen Sandison/ Independent Newspapers While the release of the government-owned land remains ever more important in South Africa's development, the country has seen very little progress in that regard. Disappointingly, the Department of Land Reform and Rural Development has made limited progress on this matter despite this being one of the central aspects of the agricultural sector's inclusive growth agenda, says Wandile Sihlobo, the chief economist at the Agricultural Business Chamber of South Africa(Agbiz). 'In essence, while we confront many present-day challenges, these long-term reforms of the AAMP and land release must continue for the sector to achieve its inclusive growth aspirations,' Sihlobo said. Delivering the Department of Land Reform and Rural Development Budget Vote Speech last week, Minister Mzwanele Nyhontsho said the overall budget of the Department for the 2025 financial year is R9 820 billion. He said relative to the total allocation, Land and Tenure Reform and Restitution have received the largest share, amounting to R6 168 billion or 63 per cent of the total allocation. 'This demonstrates that our budget is grounded on our core mandate. "The Land Redistribution and Tenure Reform branch has been allocated a total budget of R1 073 billion. Within this budget, a total allocation of R559 million has been set aside to acquire and allocate 44 000 hectares of land,' Nyhontsho said. He added that the department continues to process applications for awards of land to labour tenants, which were lodged not later than 31 March 2001. He said it should be acknowledged, though, that the area of tenure security for labour tenants, including the continuing spate of illegal evictions, remains an unacceptable situation. 'The Department is implementing a comprehensive plan to address historical inefficiencies relating to the management of state land. This includes calling for accountability from some recalcitrant officials and ensuring consequence management. "Our Department is also addressing the challenges related to Communal Property Associations (CPAs), particularly their dysfunctionality. To address this challenge, the Department is implementing measures that include the establishment of an independent CPA office, which is currently headed by an Acting Registrar. "Furthermore, a continuous process of training the executives of these structures on governance, financial management, land management, and related skills and capabilities is currently underway. A series of roadshows that will culminate with a CPA Indaba has also been planned.' The Minister said the Commission on Restitution of Land Rights has been allocated a budget of R3.7 billion for the current financial year. He said the speed with which the claims are settled is heavily reliant on the allocated budget year on year. 'To address the challenge of expediting the pace of settling of the old order land claims, i.e. those lodged before the original cut-off date of 31 December 1998, the Commission is streamlining processes, underwritten by new policies and standard operating procedures (SOPs), as part of an acceleration strategy. "That said, however, additional financial and human resources will still be required, and in general terms, we have to focus on enhancing the efficiency of the offices of the Land Claims Commission in the whole country.' Speaking at the NARYSEC YOUTH pass-out event last month, Stanley Mathabatha, the Deputy Minister in the Department of Land Reform and Rural Development, said they were well aware of the challenges facing rural communities. He said these challenges include high levels of poverty and unemployment. 'One of the most pressing issues is the legacy of colonial and apartheid uneven development between, on the one hand, developed metropolitan regions and, on the other hand, underdeveloped rural areas. "The development challenge is evident in the limited access rural communities have to economic infrastructure, economic investment, economic resources and economic opportunities that you find in developed metropolitan regions,' Mathabatha said. The deputy minister said that as a result, they continue to see growing migration patterns from rural areas to developed metropolitan regions, as people search for economic opportunities and resources. 'Some refer to this process simply as urbanisation. However, we understand that successful rural development, grounded in equitable investment and distribution of resources, and in continuously improved integrated strategic planning, can change this pattern. "By making rural areas more attractive and economically viable, we can begin to redress the uneven development imbalance and create a more inclusive, balanced national development path.' The Department of Land Reform and Rural Development said it knew the strength, resilience and untapped potential in the rural space. 'We are investing in skills, from agriculture to engineering, technology and rural industrialisation, from new venture creation to economic and social infrastructure development, to name but a few, so that youth become the drivers of rural transformation.' Independent Media Property
IOL News
04-07-2025
- Business
- IOL News
Fears of 30% tariffs loom as US-South Africa trade negotiations remain unresolved
Economists and other experts say that there is some concern following the expiry of US President Donald Trump's 90-day pause on tariff hikes on South Africa and other countries announced on Liberation Day in April. South Africa faces up to 30% tariffs if implemented. As July 9 approaches, economists and industry experts have expressed serious concern about the potential consequences of the expiry of US President Donald Trump's 90-day pause on tariff increases affecting South Africa and other countries. Following the promise of a 10% universal tariff, there is a looming threat of substantial tariffs rising to an alarming 30% if a deal is not reached by the impending deadline. This situation sends ripples of uncertainty among South African exporters who rely heavily on the US market for their products. Wandile Sihlobo, chief economist at Agricultural Business Chamber of South Africa, on Thursday highlighted the ongoing negotiations between South African businesses and US authorities but noted the prevailing ambiguity regarding future trade terms. 'South African businesses and the government have engaged, and continue to interact with US authorities regarding the path forward. However, the path forward remains unclear at this moment, although we would all like to see the continuation of the 10% tariffs rather than the 31% tariffs South Africa faced,' he said. 'The export diversification part is, of course, sound advice. However, we cannot completely abandon the US market; it is vital to South Africa and crucial to us in the agricultural sector. The export diversification comments typically point to China, suggesting that we should focus more on that area. Indeed, regular readers of this letter will be aware that China has been a primary focus for some time.' Professor Raymond Parsons, an economist from North West University, said that this was another period of heightened uncertainty for key SA exporters to the US. 'Unless a US-SA deal is struck by then, or the deadline is extended, the immediate economic worry is about the impending rise in reciprocal tariffs. About 80% of all products exported to the US by SA will get the full impact of the 30% reciprocal tariff increase,' he said. 'We must therefore not underestimate how crucial the current dialogue between the US and SA is for future trade and investment relations. This also needs to cover the future of Agoa. SA needs to buy time to stabilise and consolidate its US-SA economic relations.' Annabel Bishop, chief economist at Investec, however suggested that there might be extensions on negotiations for various US trade partners that could mitigate imminent tariff hikes. 'Substantial progress made in negotiations with most of the US's major trade partners has reduced global economic growth concerns, with time expected to be extended past next week for those still 'negotiating in good faith'. A number of key US trade partners have not had smooth sailing with their negotiations, with the biggest, the EU trade bloc, set to face tariffs up to 50% if it does not come up with a deal the Trump administration finds suitable,' Bishop said. 'However, should the period not be extended for negotiations for key trade partners, this would have a negative impact on the growth outlook.' University of KwaZulu-Natal academic and political analyst Siyabonga Ntombela, encouraged a focus on bolstering the South African economy itself, suggesting that any negative impacts from tariff hikes would also have repercussions for US companies operating in the country. 'The government should focus on growing the South African economy and not worry too much about US-imposed tariff hikes. Remember, there are more than 600 US companies in SA that stand to benefit from a healthy and functioning economy, so anything that will cripple the South African economy will have a direct and adverse impact on these companies too,' Ntombela said. Professor Bonke Dumisa, an independent economic analyst, said that the pause announced by Trump initially worked positively. 'However, it is now a well-accepted fact that Trump's tariff wars have failed; many countries are no longer scared of them. Hence, I do not think any additional days or weeks will make a positive impact. It is precisely for this reason that the USA did not publicly disclose the contents of their international agreement with China,' Dumisa said. BUSINESS REPORT
IOL News
04-07-2025
- Business
- IOL News
Fears of 30% tariffs loom as US-South Africa trade negotiations remain unresolved
Economists and other experts say that there is some concern following the expiry of US President Donald Trump's 90-day pause on tariff hikes on South Africa and other countries announced on Liberation Day in April. South Africa faces up to 30% tariffs if implemented. As July 9 approaches, economists and industry experts have expressed serious concern about the potential consequences of the expiry of US President Donald Trump's 90-day pause on tariff increases affecting South Africa and other countries. Following the promise of a 10% universal tariff, there is a looming threat of substantial tariffs rising to an alarming 30% if a deal is not reached by the impending deadline. This situation sends ripples of uncertainty among South African exporters who rely heavily on the US market for their products. Wandile Sihlobo, chief economist at Agricultural Business Chamber of South Africa, on Thursday highlighted the ongoing negotiations between South African businesses and US authorities but noted the prevailing ambiguity regarding future trade terms. 'South African businesses and the government have engaged, and continue to interact with US authorities regarding the path forward. However, the path forward remains unclear at this moment, although we would all like to see the continuation of the 10% tariffs rather than the 31% tariffs South Africa faced,' he said. 'The export diversification part is, of course, sound advice. However, we cannot completely abandon the US market; it is vital to South Africa and crucial to us in the agricultural sector. The export diversification comments typically point to China, suggesting that we should focus more on that area. Indeed, regular readers of this letter will be aware that China has been a primary focus for some time.' Professor Raymond Parsons, an economist from North West University, said that this was another period of heightened uncertainty for key SA exporters to the US. 'Unless a US-SA deal is struck by then, or the deadline is extended, the immediate economic worry is about the impending rise in reciprocal tariffs. About 80% of all products exported to the US by SA will get the full impact of the 30% reciprocal tariff increase,' he said. 'We must therefore not underestimate how crucial the current dialogue between the US and SA is for future trade and investment relations. This also needs to cover the future of Agoa. SA needs to buy time to stabilise and consolidate its US-SA economic relations.' Annabel Bishop, chief economist at Investec, however suggested that there might be extensions on negotiations for various US trade partners that could mitigate imminent tariff hikes. 'Substantial progress made in negotiations with most of the US's major trade partners has reduced global economic growth concerns, with time expected to be extended past next week for those still 'negotiating in good faith'. A number of key US trade partners have not had smooth sailing with their negotiations, with the biggest, the EU trade bloc, set to face tariffs up to 50% if it does not come up with a deal the Trump administration finds suitable,' Bishop said. 'However, should the period not be extended for negotiations for key trade partners, this would have a negative impact on the growth outlook.' University of KwaZulu-Natal academic and political analyst Siyabonga Ntombela, encouraged a focus on bolstering the South African economy itself, suggesting that any negative impacts from tariff hikes would also have repercussions for US companies operating in the country. 'The government should focus on growing the South African economy and not worry too much about US-imposed tariff hikes. Remember, there are more than 600 US companies in SA that stand to benefit from a healthy and functioning economy, so anything that will cripple the South African economy will have a direct and adverse impact on these companies too,' Ntombela said. Professor Bonke Dumisa, an independent economic analyst, said that the pause announced by Trump initially worked positively. 'However, it is now a well-accepted fact that Trump's tariff wars have failed; many countries are no longer scared of them. Hence, I do not think any additional days or weeks will make a positive impact. It is precisely for this reason that the USA did not publicly disclose the contents of their international agreement with China,' Dumisa said. BUSINESS REPORT
