The Consumer Price Index (CPI) released by Statistics South Africa (Stats SA) in May 2010 indicates that food price increased by 0.9 % from April 2009 to April 2010. The annual increase of 0.9 % is well below the lower limit of the South African Reserve Bank's target inflation bracket. Food price inflation decreased on a monthly basis by 0.4 percentage points. Headline CPI annual inflation decreased by 0.3 percentage points from March 2010 (5.1 %) to April 2010 (4.8 %).
South Africa's food inflation and overall inflation are substantially lower than the food inflation and overall inflation reported for some African countries and most of the developing countries reviewed in this report. South Africa's food inflation in April 2010 are at comparable levels, and even lower to the levels of food inflation in some developed countries, e.g. the United States experienced annual food inflation of 0.5 % and the United Kingdom experienced annual food inflation of 2.9 % for the period ending April 2010. Domestic prices of wheat, white maize and yellow maize continued to decrease while the price of sunflower seeds and the milk producer price increased for the period April 2009 to April 2010. Sugar, sweets, desserts and fruit showed the most significant price increases for the period under review in urban areas, while coffee and tea showed the most significant price increases in rural areas. Processed food product prices increased by 2.2 % and unprocessed food product prices decreased by 1.5 % year-on-year from April 2009.
Consumers in rural areas continued to pay higher prices for food than consumers in urban areas. In April 2010 consumers in rural areas paid R17.78 more for the same food basket than consumers in urban areas. From April 2009 to April 2010 the cost of the basic food basket decreased by about R3.57 (1 %) in nominal terms. The cost of the food basket expressed as a share of the average monthly income of the poorest 30 % of the population decreased slightly from 33.4 % in April 2009 to 33.0% in April 2010.
A comparison of the costs associated with the typical portion sizes of very poor consumers for the five most widely consumed food items in South Africa, based on April 2010 versus April 2009 prices, indicate a minimal deflation of about 0.3 % (to R3.06), in particular due to deflation in staple foods.