SOUTH AFRICA – South African consumers are set to experience a significant slowdown in poultry price hikes, with the annual rate expected to moderate to around 1% for some chicken products.
This marks a sharp decline from the double-digit inflation rates that have characterized the market in recent years.
The latest AgriTrends report from Absa attributes this shift to increased poultry production in Brazil and a strengthening rand.
Absa’s study indicates that, while chicken prices are unlikely to decrease, they are anticipated to remain stable due to a combination of factors.
A robust rand and higher output from major poultry suppliers like Brazil are expected to limit the average price increase to just over 1% this year.
This is a stark contrast to the significant price jumps witnessed over the past two years, which have contributed to broader food inflation and affected household budgets, especially for lower-income groups.
Dr. Marlene Louw, a Senior Economist at Absa AgriBusiness, pointed to disease outbreaks such as avian influenza as key drivers behind the earlier price surges.
However, she remains hopeful that reduced feed costs will enhance producer profitability, potentially leading to increased supply and less pressure on prices in the near future.
Poultry makes up about two-thirds of the meat consumed in South Africa, playing a crucial role in the diets of many lower-income and working-class families.
While approximately 20% of the country’s chicken, mainly frozen portions, is imported, the bulk of the supply comes from Brazil.
The anticipated increase in Brazilian production combined with the stronger rand is expected to moderate the rate of price inflation for chicken.
Despite the positive outlook, the Absa report cautions that ongoing disease outbreaks could still impact trade patterns and put upward pressure on prices.
Food inflation in South Africa has been easing, with the annual rate falling to 3.9% in July from 4.1% in June, the lowest level since January 2020.
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