By Paul Makube, Senior Agricultural Economist, FNB Commercial
The latest update on consumer price inflation (CPI) indicates good news for consumers as food price inflation decelerated for the second consecutive month to 4.4% year-on-year (y/y) in September 2025 underpinned by a slowdown in vegetables, fruits and nuts, oils and fats, and milk, other dairy products and eggs categories.
Monthly, the food CPI remained in deflationary mode after decreasing by 0.4% month‑on-month (m/m) in September from -0.1% m/m in August 2025.
Meanwhile, chips lovers can breathe a sigh of relieve after average potato prices at consumer level dropped sharply by 8.3% (-R1.6/kg) m/m and 17.8% (-R3.84/kg) y/y to R17.72/kg in September 2025. This weighed heavily on the vegetable CPI which saw a significant deceleration of 8.1 percentage points from the August reading to a low of 1.2% y/y since January 2025. Monthly, the vegetable CPI fell for the third consecutive month to -5.5% m/m in September 2025.
We are likely to see a continuation of this trend in the subsequent CPI updates given the significant downside pressure on potato prices that we currently observe at producer level. Our analysis of latest trends on domestic fresh produce markets shows a significant downside pressure on potato prices on the back of a strong rebound in production during the course of 2025. A combination of a positive turn in weather conditions and the increase in planted area underpinned the increased supply situation on the domestic Fresh Produce Markets (FPMs).
This is a significant reversal of a weather-induced supply tightness that emanated from the extreme freezing conditions that affected parts of Limpopo and flooding conditions in the Western Cape around mid-year in 2024. The average price of potatoes on five major FPMs for the first three weeks of October 2025 was down by 58.7% y/y at R4.65/kg, while the corresponding volumes lifted by a whopping 28% y/y.
The supply outlook remains impressive given the higher plantings and favourable production conditions, thus posing further downside risk for prices in the medium term.
cooking oil prices are also in deceleration mode under pressure due to decent harvests of sunflower (+12.1% y/y at 708,300 tons) and canola (+7.3% y/y at 311,640 tons). Meanwhile, global vegetable oil inflation continued to trend negatively for thirty-one consecutive months after falling by 7.5% y/y in September 2025. The combination of a stronger rand exchange rate, lower international vegetable oil prices, and a decent domestic oilseeds harvest bodes well for consumers in terms of reduced frying costs.
Finally, the near-term seasonal outlook still points to the return of the La Nina weather pattern which increases prospects of another good agriculture season with positive implications for food inflation.
