The Drivers of Food Price Inflation in South Africa

This paper investigates the drivers of food price inflation in South Africa using a General-to-Specific (GETS) modelling approach. It finds that food inflation is primarily driven by cost-push factors, including input costs such as electricity, fuel, and international food prices, with manufacturing producer prices passing through more fully to consumers than agricultural prices. Demand-pull effects, particularly changes in the money supply, also contribute to inflationary pressures. The analysis reveals that global shocks, such as oil prices, exchange rate fluctuations, and geopolitical events, amplify domestic food inflation, especially in key categories such as meat, bread, and cereals. These findings underscore the importance of considering the entire food value chain, beyond farm-level dynamics, when designing policy interventions to mitigate food inflation and its socio-economic impacts.