Good news for meat lovers in South Africa

 ·1 Mar 2024

Producer price inflation (PPI) has grown, but there are positive signs for food prices, especially meat prices, in South Africa.

According to the latest data from Stats SA, PPI increased from 4.0% in December 2023 to 4.7% in January 2024 – broadly in line with expectations. PPI increased by 0.1% month-on-month.

The main contributors to the headline PPI annual inflation rate were:

  • Food products, beverages and tobacco products (increased by 4.0% year-on-year and contributed 1.2 percentage points);

  • Metals, machinery, equipment and computing equipment (increased by 5.8% year-on-year and contributed 0.8 of a percentage point);

  • Coke, petroleum, chemical, rubber and plastic products (increased by 2.7% year-on-year and contributed 0.7 of a percentage point); and

  • Transport equipment (increased by 7.3% year-on-year and contributed 0.6 of a percentage point)
Source: Stats SA

Although the food products, beverages and tobacco products category increased, manufactured food price inflation decelerated from 4.7% in December to 3.6% in January.

Investec economist Lara Hodes said that when breaking down the food basket, meat and meat products inflation dropped from 4.1% in December to 2.0%.

The supply of meat has been a critical upside risk to food inflation over the last few months, but this has recovered since the widespread avian influenza (bird flu) outbreak in 2023.

Agbiz Chief Economist Wandile Sihlobo said that the recovery in poultry production follows interventions from both the industry and government at the end of last year.

Grain mill products, starches and starch products, and animal feeds also dropped further from -3.1% to -4.4%, supported by a contraction in inflation of specifically starches, starch products and animal feeds.

Oil and fat prices dropped by 17.2% in January, supported by the 12.8% decline in the Food and Agriculture Organization of the United Nations’ vegetable oil price index.

Fruit and vegetable price inflation may have increased from 10.8% to 11.8%, but Agbiz said that prices will likely slow in the coming months as product volumes increase in various Fresh Produce Markets.

“Unlike field crops, the horticulture industry is under irrigation and thus benefits from improved dam levels in the current dry spell and high temperatures in various regions,” said Sihlobo.

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