After reaching a new all-time high in March 2022 and decreasing by 0.6% (month-on-month) in April 2022, the FAO Food Price Index (FPI) decreased by a further 0.6% (month-on-month) in May 2022.
The downturn was mainly driven by the vegetable oil, dairy and sugar sub-index, while the cereal and meat price indices increased. In May 2022 the index was 20.8% higher than in May 2021. The FAO Cereal Price Index increased by 27.6% year-on-year and 2.2% month-on-month in May 2022. The main contributor to the rising cereal price index was wheat prices, driven by India’s wheat export ban, production condition uncertainties and the ongoing war which has markedly reduced production and export prospects in Ukraine. The FAO Meat Price Index increased by 11.7% year-on-year and 0.5% month-on-month in May 2022. The main contributor to the rising meat price index was poultry meat, driven by continued supply chain disruptions in Ukraine, avian influenza outbreaks and high demand in Europe and the Middle East. Figure 1 illustrates that, in May 2022, food inflation in South Africa remained lower than food inflation in Zambia, Kenya, Brazil, the USA and the EU. However, food inflation in South Africa (followed by China) showed the highest month on month increase among these countries, and may signal a catching-up scenario.
