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Meat inflation drops to -0.1% year-on-year, boosting festive braai season

12 Dec 2024

With just over a week to go, consumers can breathe a sigh of relief as meat inflation entered deflationary territory for the first time since May 2019 after clocking a negative growth of -0.1% year-on-year in November 2024 from 0.5% in October, according to Statistics South Africa’s latest update. Monthly, meat inflation was flat from October to November.

Source: davyart via Pixabay

This is good news for consumers as they ramp up purchases for the December festive braais following a further 25-basis point interest rate cut in November 2024. Although meat prices follow a normal seasonal upswing during this period, the current prices are still way below the previous years.

The slight improvement in consumers’ financial welfare following the recent interest rate easing and the liquidity injection in the economy due to the two-pot retirement withdrawals will boost meat demand during the braai season.

Food inflation at historic low

Overall food inflation fell to an almost 14-year low of 1.6% year-on-year in November 2024 from 2.8% in October with two of the nine categories in deflation and four positing lower rates which included bread and cereals; milk, eggs and cheese; sugar, sweets and deserts; and other food.

The food inflation sub-categories of milk, eggs and cheese; oils and fats; and fruit accelerated in November while fish was unchanged from the October level.

A drill down into the meat CPI data shows modest decreases across the red meat complex with beef rump steak decreasing by -1.5% (-R2.44/kg) year-n-year, beef chuck by -0.6% (-R0.68/kg) year-on-year, beef T-bone by -1.8% ( R2.31/kg) y/y, pork chops by -3.5% (-R3.21/kg) year-n-year, and pork ribs by -4.1% (-R4.11/kg) year-on-year.

Chicken was, however, an exception with the individually quick frozen (IQF) 2 kg chicken portions increasing by 2.8% (+R2.60/kg) year-on-year at R95.45/kg.

Global context

In contrast, the global food price inflation as measured by the United Nations Food and Agriculture Organization (FAO) was much higher at 5.7% year-on-year in November 2024, but slowed monthly by 0.5% month-on-month from 1.8% m/m previously. Global meat inflation however remained in deceleration mode at 5.9% y/y in November from 6.3% in October, and monthly in deflation at -0.8% m/m.

We expect a further reprieve for meat lovers early in the New Year as the lower seasonal demand post the December holidays places downward pressure on meat prices.