Festive braais boosted as meat inflation contracts to -0.1% y/y, the lowest since May 2019

With just over a week to go, consumers can breathe a sigh of relief as meat inflation entered a deflationary territory for the first time since May 2019 after clocking a negative growth of -0.1% y/y 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.  

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.

Overall food inflation fell to an almost 14-year low of 1.6% y/y 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 drilldown into the meat CPI data shows modest decreases across the red meat complex with beef rump steak decreasing by -1.5% (-R2.44/kg) y/y, beef chuck by -0.6% (-R0.68/kg) y/y, beef T-bone by -1.8% ( R2.31/kg) y/y, pork chops by -3.5% (-R3.21/kg) y/y, and pork ribs by -4.1% (-R4.11/kg) y/y. Chicken was however an exception with the individually quick frozen (IQF) 2 kg chicken portions increasing by 2.8% (+R2.60/kg) y/y at R95.45/kg.

In contrast, the global food price inflation as measured by the United Nations Food and Agriculture Organization (FAO) was much higher at 5.7% y/y in November 2024, but slowed monthly 0.5% m/m 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 place downward pressure on meat prices.