By Paul Makube, Senior Agricultural Economist, FNB Commercial
After accelerating to an eighteen-month high of 5.5% year-on-year (y/y) in July, food inflation reversed course and slowed to 5.2% y/y in August 2025 underpinned by a modest deceleration in cereal products, fruits and nuts, and vegetables as well as a decrease in the milk, other dairy products and eggs category.
Monthly, food inflation fell by 0.8% month-on-month (m/m) led by declines in cereal products and vegetables including a slowdown in the meat category.
After a 2025 peak of 4.8% y/y in April, cereal products inflation extended its downtrend for the fourth consecutive month to 1.5% y/y in August as strong seasonal harvests weighed heavily on raw commodity prices. South Africa’s 2024/25 commercial summer crop harvest estimate saw a further upward adjustment from July by 4.3% to 19.55 million tons, a whopping 25.9% upswing from last year’s level.
This is 2.6% shy off the record high of 20.07 million tons achieved during the 2022/23 season. At same time, the stronger rand continued to pose downside risk on grain and oilseed prices. Consequently, maize prices fell by 17% and 3% y/y for the white and yellow varieties respectively to an average of R4,433/t and R3,931/t in August 2024.
Although posting a modest monthly deceleration of 0.4% m/m in August 2025 from 3.3% m/m in July, meat inflation remained the biggest drag on overall food inflation after quickening further to a 30-month high of 11.3% y/y.
Foot-and-mouth disease (FMD) has been the biggest catalyst in the volatility in meat prices over the past few months. However, the FMD-induced supply crunch dissipated somewhat recently due to the combination of an export ban that raised local availability and the improved slaughter rates.
Although earlier restrictions of chicken imports from Brazil were lifted, volumes have not recovered to make a significant dent on prices. Poultry import volumes in July were down by 34.9% m/m and 70.9% y/y at 10,543 tons, with the year-to-July total down by 30.2% y/y at 176,703 tons. The intermittent FMD outbreaks remains a huge uncertainty in the market due to its interruptions to the slaughter pattern and the subsequent price volatility.
With better seasonal production conditions in the forecasts for the 2025/26 crop season coupled with a resurgent rand exchange rate, we can expect further downside surprises in food inflation outcomes in the medium term.
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