Fears about the likely higher food price inflation in various parts of the world have been in the headlines for some time. The major catalyst for this discussion in recent months has been the ongoing United States (US)-Iran war and the upside pressure it exerts on fuel and fertiliser prices. The drought and heatwave in Europe and the Americas are another challenge.

In recent weeks, Russia’s aggressive efforts to bomb key infrastructure in Ukraine have also added to the risks of higher food price inflation in various parts of the world. How all these events will affect the global food system remains to be seen in the coming year.

For now, the various regions of the world continue to benefit from the ample agricultural harvests of the previous years. Here in South Africa, for example, we are seeing the benefits of ample agricultural output from the 2025-26 season reflected in inflation data, which continues to decelerate.

The figures released by Statistics South Africa last week showed that the country’s annual consumer food price inflation slowed to 0.6% in July 2026, from 1.4% in June. This is the lowest level since 2010.

Grain-related products, fruits and nuts, and vegetables remained in deflation, all due to large supplies on the back of an excellent harvest necessitated, among other things, by the La Niña rains in the season we are closing.

Also positively, meat price inflation has slowed from recent levels, as slaughtering continues and supplies recover. The meat supply had been a concern due to foot –and mouth disease in cattle and African swine fever cases in the pork industry. While these challenges remain, vaccination against foot –and mouth disease in the cattle industry is gaining momentum across the country.

A Detailed View

Now, if we zoom in on the key products, cereal (grain) products are in deflation, as we are in yet another year of better grain production. South Africa’s summer grains and oilseeds production is forecast at a record 21.6 million tonnes, up 5% from the 2024-25 season, according to the latest data from the Crop Estimates Committee. This figure comprises maize, sunflower seeds, soybeans, groundnuts, sorghum, and dry beans. This ample harvest adds to already large stocks from the past season, keeping grain prices under pressure.

Similarly, fruits and vegetables are in a deflationary trend. Clearly, while the recent floods are destructive in parts of the Eastern and Western Cape, the country’s fruit harvest remains ample, thereby exerting continued downward pressure. The production conditions for vegetables remain broadly favourable.

Regarding meat, the pace of cattle slaughter has declined somewhat, though not notably. Another fact worth keeping in mind is that during foot –and mouth disease outbreaks, the country is typically temporarily closed to some export markets, leading to increased domestic supplies, even if slaughter has declined somewhat. Base effects on meat prices, along with continued cattle slaughter, have helped ease price inflation. Poultry production conditions are also favourable.

A Low Food Price Inflation Path For Now

In essence, South Africa’s ample agricultural harvest will help keep consumer food price inflation under pressure throughout 2026.

Still, the US-Iran war and risks in the Strait of Hormuz remain the major near-term risks, likely leading to higher fuel costs. Fuel accounts for a substantial share of the distribution costs of food products. Notably, over 80% of staple food products are transported by road.

Looking ahead, the medium-term risk is the forecast El Niño drought, but this may only affect the direction of 2027 food price inflation, as it affects the next season’s crop, which will be planted from mid-October and come to market in mid-2027.

Based on this view, South Africa remains better placed than some regions of the world for now and will experience lower food price inflation in the coming months.

Wandile Sihlobo is the presidential envoy on agriculture and land. He is also the chief economist of the Agricultural Business Chamber of South Africa, and a senior research fellow in the Department of Agricultural Economics at Stellenbosch University.