While food prices globally are falling, South Africa is bucking the trend as the worst drought in more than 100 years drives prices of staples including white corn to record highs.

Food inflation in Africa’s most-industrialized economy accelerated to 5.9 percent in the year through December, from 4.8 percent the previous month. That’s more than the consumer inflation rate of 5.2 percent, and a pace that threatens to push price increases above the upper limit of the Reserve Bank’s 3 percent to 6 percent target range, according to Nedbank Group Ltd. That may force the central bank to increase borrowing costs by as much as 50 basis points next week, the Johannesburg-based lender said in a note on Thursday.

Food prices are among “the key issues the Reserve Bank needs to address as their primary mandate is price stability,” and, together with rand weakness, may prompt “a larger monetary policy response in the form of more aggressive hikes,” Nedbank said.

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