Higher global rice prices do not materially affect our South Africa food inflation view

Published Apr 24, 2023

Tridge summary

The article provides an overview of the global and local food inflation situations, with a focus on South Africa. It discusses the recent surge in global rice prices, which is expected to be temporary due to anticipated production increases in the 2023/24 season. Despite global agricultural commodity prices softening, South Africa's consumer food price increases have accelerated, with a peak expected in the near future. Factors contributing to high prices include high grain prices from the previous year, disrupted vegetable production, and load-shedding. However, a better outlook for South Africa's consumer inflation food price in the later half of the year is anticipated, with expectations of moderation in meat, grain-related products, vegetable oils, and fruits. The article also mentions the impact of weather conditions and planting intentions on South Africa's grain production, trade data, and suppliers of wheat to South Africa, highlighting the return of Russia as a significant supplier in the 2022/23 season.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

In recent notes, we expressed a view of potential moderation in the consumer food inflation in the second half of the year. We believe that the products that will underpin this softening are grains-related products, vegetable oils, meat and fruit. But within the grains category, South Africa is exposed to imports, particularly for wheat and rice. Global grain prices have declined over the past few months, except rice, which has surged. However, this does not change our view on domestic food inflation. This note explains our thinking on global rice prices. In April 2022, rice from various origins, such as Thailand, Vietnam, India, and Pakistan, traded below US$400 per tonne. This month, except for India, these rice price origins traded over US$470 per tonne. This is notable considering that for much of 2022, when other grains such as wheat and maize surged following the invasion of Ukraine by Russia and drought in South America, rice prices remained steady and even softened in some ...

Source: Farmingportal