El Niño Threatens SA Food Price Inflation as Grain Supplies Ease

The El Niño weather pattern is expected to bring below-normal rainfall and above-normal temperatures across much of South Africa, posing a risk to food price inflation next year. The country's food price inflation remained close to its lowest level in more than a decade in August, with an annual increase of 0.7%. This moderation has been driven largely by strong agricultural production during the 2025/26 season, particularly in grains.

The agriculture department recently said El Niño conditions were expected to continue through the 2026/27 summer, which can contribute to crop failures, livestock losses, water restrictions, and higher production costs. Agbiz chief economist Wandile Sihlobo expects the weather risk to have a greater bearing on food price inflation next year than this year.

The current record grain harvest of 21.6-million tonnes has added to supplies, keeping grain prices under pressure. The prices of staple products like cereal, white rice, and fruit and vegetables remain below year-earlier levels. Meat prices have also contributed to the moderation, with beef remaining in deflation.

Fish and seafood inflation accelerated to 7.5% in August from 6.6% in July, while milk, dairy products, and eggs rose to 2.1%. The broader inflation picture shows food is providing some relief while other costs remain elevated.