The latest update from the United Nation’s Food and Agriculture Organization (FAO) showed world food price inflation posted a third consecutive monthly decrease by 2.3% month-on-month (m/m) and decelerated further to 23.1% y/y in June 2022 from 23.3% y/y in May (figure 1b).
This was largely due to declines in global prices of vegetable oils, cereals, and sugar, which more than offset gains in the dairy and meat categories.
Senior Agricultural Economist at FNB Paul Makube said that the Global meat price inflation jumped 1.7% m/m and was 12.7% higher y/y in June from 14.2% y/y in May 2022, which is a fourth consecutive month of deceleration.
“Gains in poultry (+28.9% y/y) and bovine (+15.5% y/y) prices more than offset declines in pig meat (-1.3% y/y) and ovine meat (-2.9% y/y) categories (table 1). The combination of the bird flu outbreaks in the Northern Hemisphere and the supply tightness due to the war impact on global trade were cited as reasons for the sharp upswing in poultry prices, while gains in beef was underpinned by renewed demand from China after it lifted its earlier embargo on Brazilian imports,” he said.
Makube said that on the domestic front, the June inflation update is due for release this week. However, the headline inflation for May 2022 quickened to 6.5% year-on-year (y/y) from 5.9% in April underpinned by the surprise acceleration in food and non-alcoholic beverages, including increases in housing and utilities; transport; and miscellaneous goods and services.
“Food and non-alcoholic beverages inflation jumped 2.1% month-on-month (m/m) and 7.6% y/y. Food alone posted a monthly increase of 2.2% m/m which is the highest since FEB 2016 and jumped to a new record high since MAR 2017 at 7.8% y/y largely on the back of spill over price pressures from the global market.”
In the animal protein category, meat posted the biggest monthly increase since JAN 2018 at 1.9% m/m and was at its highest level in eight months at 9.4% y/y.
