Plunging rand, soaring corn price to stoke S. African inflation
"Dollar/rand remains on the path toward 11.00," said Anisha Arora of 4Cast, citing the possibility of renewed strikes in the platinum sector in addition to concerns about Fed tapering.
Higher maize prices may also hurt the ruling African National Congress (ANC) in the run-up to the election in April or May.
Stocks of maize are at just over 3 million tonnes, compared with more than 5 million a year ago, and farmers' group Grain SA says Africa's biggest producer may have to import maize to make ends meet.
Importing maize will further drive up food prices, already one of the biggest expenses for the poorest in South Africa, who also form the support base of President Jacob Zuma.
Zuma's African National Congress (ANC) party is set to win the election comfortably, but his popularity is at an all-time low, dented by accusations of mismanagement and corruption, and there will be serious questions about his position if the ANC fails to capture 60 percent of the vote.
Farmers in the North West, the region hardest hit by low rainfall, are critical of the government's drought relief programme.
In particular, they say the slow roll-out of assistance has seen many cattle die, while the public tendering of relief contracts through middle-men leads to inflated feed prices - and ultimately more expensive meat.
Economists say that, with Africa's biggest economy expected to gain traction this year and grow 2.8 percent as global demand picks up, it is inevitable that the relatively benign headline inflation seen in October and November will change course before long.
"Inflation is set for a reversal," said Matthew Sharratt, a Cape Town-based economist at Bank of America Merrill Lynch.
"We're looking for a 5.8 percent average through the first half of this year - very close to the top of the band - but the maize price story is something that provides additional upside risk," he said.
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