Chips lovers breathe a sigh of relief following falling potato prices

Source: Couleur via Pixabay

Monthly, the food CPI remained in deflationary mode after decreasing by 0.4% month‑on-month in September from -0.1% month-on-month in August 2025.

Potato prices drop sharply

Meanwhile, chip lovers can breathe a sigh of relief after average potato prices at the consumer level dropped sharply by 8.3% (-R1.6/kg) m/m and 17.8% (-R3.84/kg) year-on-year to R17.72/kg in September 2025.

This weighed heavily on the vegetable CPI, which saw a significant deceleration of 8.1 percentage points from the August reading to a low of 1.2% year-on-year since January 2025. Monthly, the vegetable CPI fell for the third consecutive month to -5.5% month-on-month in September 2025.

Producer-level trends and market supply

We are likely to see a continuation of this trend in the subsequent CPI updates, given the significant downside pressure on potato prices that we currently observe at the producer level.

Our analysis of the latest trends in domestic fresh produce markets indicates significant downside pressure on potato prices, stemming from a strong rebound in production throughout 2025.

A combination of a positive turn in weather conditions and the increase in planted area underpinned the increased supply situation on the domestic Fresh Produce Markets (FPMs).

This is a significant reversal of a weather-induced supply tightness that emanated from the extreme freezing conditions that affected parts of Limpopo and flooding conditions in the Western Cape around mid-year in 2024.

The average price of potatoes on five major FPMs for the first three weeks of October 2025 was down by 58.7% year-on-year at R4.65/kg, while the corresponding volumes lifted by a whopping 28% year-on-year.

The supply outlook remains impressive given the higher plantings and favourable production conditions, thus posing further downside risk for prices in the medium term.

Cooking oil prices in deceleration mode

Cooking oil prices are also in deceleration mode under pressure due to decent harvests of sunflower (+12.1% year-on-year at 708,300 tonnes) and canola (+7.3% year-on-year at 311,640 tonnes).

Meanwhile, global vegetable oil inflation continued to trend negatively for thirty-one consecutive months after falling by 7.5% year-on-year in September 2025.

The combination of a stronger rand exchange rate, lower international vegetable oil prices, and a decent domestic oilseeds harvest bodes well for consumers in terms of reduced frying costs.

Finally, the near-term seasonal outlook still points to the return of the La Nina weather pattern, which increases prospects of another good agricultural season with positive implications for food inflation.