In­fla­tion falls as record har­vest ex­pected

The Poultry Bulletin - - CONTENTS - The ar­ti­cles above have all been com­piled by the Ed­i­tor and do not nec­es­sar­ily rep­re­sent the views, opin­ions or po­si­tions of SAPA.

The ben­e­fits of higher agri­cul­tural out­put so far this year fol­low­ing good sum­mer rain­fall across the coun­try has seen an­nual food pro­ducer price in­fla­tion de­cel­er­at­ing to 4.7% y/y in June 2017, from 5.7% y/y in May 2017. The de­cel­er­a­tion was largely in grain, sugar, dairy, starches, veg­etable and fruit prod­ucts, while meat and meat prod­ucts ac­cel­er­ated due to on-go­ing cat­tle herd re­stock­ing process re­sult­ing from the 2015-16 drought, as well as low base fac­tors.

Wandile Sihlobo, econ­o­mist at Ag­biz, says the gen­eral de­cel­er­a­tion in food pro­ducer in­fla­tion is due to the re­cov­ery in agri­cul­tural pro­duc­tion. The to­tal pro­duc­tion of sum­mer grains and oilseeds is es­ti­mated at 18.44 mil­lion tonnes, which is a 96% an­nual in­crease.

This has led to a wide­spread de­cline in agri­cul­tural com­mod­ity prices. White maize spot price cur­rently trades at lev­els around R1 768 tonnes, which is 59% lower than the same pe­riod last year. Yel­low maize spot price is trad­ing at lev­els around R1 889 per tonne, which is 42% lower than the same pe­riod last year. Soy­bean spot price is at a level around R4 711 per tonne, which is a 31% an­nual de­cline. The de­cline in yel­low maize and soy­bean prices will also ben­e­fit other sec­tors, such as the live­stock and poul­try.

Look­ing ahead, the large agri­cul­tural out­put will keep agri­cul­tural com­mod­ity prices un­der pres­sure over the shortto-medium term, es­sen­tially mean­ing that food in­fla­tion also could re­main at rel­a­tively lower lev­els.¡

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