Annual headline inflation jumped to 4,4% in April from 3,2% in March, mainly driven by rising transport and food prices. This is the highest reading since before the lockdown, which was 4,6% in February 2020.
Over the last 14 months, consumer price inflation was relatively subdued throughout the lockdown. The lockdown began on 27 March 2020. Headline inflation retreated from 4,6% in February 2020 to 3,0% in April 2020. The rate bottomed out at 2,1% in May 2020, the lowest reading in just over 15 years.
Fuel, public transport and vehicle prices push transport costs higher
Annual transport inflation jumped to 10,6% in April 2021, mainly due to a rise in fuel prices, public transport and new vehicles.
Petrol prices reached their highest level on record. Inland 95-octane petrol was R17,32 per litre in April, R1,00 higher than it was in March.1 The annual inflation rate for fuel was 21,4% in April, with a monthly rise of 5,4%. Fuel prices have ratcheted up significantly in recent months, with about two-thirds of the 21,4% increase accumulating during February, March and April. By comparison, there was a 12,8% annual drop in fuel prices in April 2020. The international price of oil rose from approximately $27 per barrel in April 2020 to around $50 by the end of 2020 and to $65 in April 2021.2
Public transport fares increased by 5,1% in April 2021 compared with April 2020. New vehicle prices climbed by 5,5% over the same period.
Meat, dairy and oil prices drive up food inflation
Food and non-alcoholic beverages increased by 0,9% between March and April. This took the annual rate to 6,3%, the highest it has been since 6,8% in July 2017 (45 months ago). At that time, parts of South Africa were experiencing severe drought.
The categories with the most significant impact on food prices in April 2021 were meat; milk, eggs & cheese; and oils & fats.
Annual meat inflation accelerated to 7,1% in April from 6,7% in March. This was the 6th consecutive month that the rate was above 6,0%. Products that recorded significant increases in April include IQF chicken portions (6,3%) and stewing beef (12,1%).
Prices for milk, eggs & cheese products rose by 7,8% over the past 12 months, higher than March’s 7,2%. The April rate is the highest since March 2017 (9,2%). Fresh and long-life full cream milk saw annual rises of 6,5% and 5,2%, respectively. Sour milk (19,2%) and flavoured yoghurt (10,2%) also recorded high annual price increases.
Oils and fats products hit an inflation rate of 16,7%, the highest since August 2016 (56 months ago) when the rate was 17,6%. Prices increased by 4,1% from March 2021. Cooking oil prices rose by 21,6% over the past 12 months.
The annual rate for alcoholic beverages and tobacco rose to 4,8% from 3,7% in March. The monthly increase in April was 0,5%. Almost half of the 12-month increase occurred in the first four months of 2021.
For more information, download the April 2021 Consumer Price Index (CPI) release here.
1 Department of Mineral Resources and Energy. Comparing prices for petrol, diesel and illuminating paraffin (IP) (click here).
2 Oil price: Brent crude in US dollars per barrel; source: Iress (visit their site here).
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