A slight breather for consumers as meat price inflation decelerates

Statistics South Africa’s (SA) January 2022 consumer price inflation print slowed to 5.7% year-on-year (y/y) from 5.9% in December 2021.

Gains in the food and non-alcoholic beverages, housing and utilities, transport, and the miscellaneous goods and services underpinned the upside in the CPI outcome.

Senior Agricultural Economist at FNB Paul Makube, said that underpinned by elevated prices in the prices of fish, oils and fats, and vegetables, SA’s food CPI for January 2022 accelerated by 6.2% y/y relative to the 5.9% recorded in the previous month.

“On the global front, the United Nation’s Food and Agriculture Organization’s (FAO) food price inflation slowed for the fifth consecutive month to 19.5% y/y in January 2022 although still elevated at double digit levels.”

In the animal protein category, SA’s meat price inflation decelerated to 8.2% y/y from the previous month and was unchanged at 1.2% month-on-month (m/m). The seasonal moderation in demand post the December holidays helped limit further upside for meat prices. In the beef subcategory, beef offal posted the biggest increase of 30.3% m/m and 39.6% y/y at R59.28/kg which reflects the high demand as consumers switch to cheaper products.

Makube said pork remained under pressure with declines across most cuts with pork fillet decreasing by 4.4% m/m and 12.8% y/y at R93.98/kg. Although easing m/m across most cuts, chicken prices were moderate to sharply higher relative to last year with the fresh whole chicken and IQF chicken portions increasing 18.3% and 6% respectively y/y at R58.98/kg and R82.23/kg (fig.1e).

Global meat prices also decelerated for the fourth consecutive month to 17.3% y/y but marginally higher m/m.

“A combination of strong import demand and reduced availability of slaughter cattle in Brazil and Oceania underpinned the recent strength in bovine prices. Similarly, pork prices advanced on supply shortages and contraction in production due to the elevated input costs. The poultry and ovine prices however came in on the downside due to volume pressure.”

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