Poultry price inflation slowing significantly, says Absa

Chicken is not about to get cheaper, but trends are hatching which should keep its price from flying out of reach for South African consumers. 

“... a stronger rand and robust growth in production by key global suppliers such as Brazil, could see the average price of chicken products increase by just over 1% this year in some instances,” Absa said in its latest AgriTrends report. 

Over the past two years, poultry price increases in South Africa have reached double digits against the backdrop of accelerating food inflation in general – trends which have eaten into household incomes, especially those in the lower brackets. 

“In recent times, the outbreak of diseases like avian influenza has caused a global shortage of this protein source, which put upward pressure on prices,” Dr Marlene Louw, Senior Economist at Absa AgriBusiness, was quoted as saying. 

“While potential new disease outbreaks may change the price outlook going forward, all things being equal, we expect that lower feed prices will improve margins for producers, which could stimulate supply. This could in turn assist in keeping price increases contained over the medium term, which is good news for consumers.” 

Chicken accounts for about two-thirds of South African meat consumption and is a vital source of protein for poor and working-class households. About 20% of South Africa’s chicken, mostly frozen portions, is imported, with the bulk coming from Brazil. 

But increased production from Brazil – which recently had another disease outbreak – combined with the stronger rand, are trends which should slow chicken price inflation. 

“After double-digit increases in 2022 and 2023, we expect poultry price increases to ease... Ongoing disease issues hold an upside to this view and have the potential to exert upward price pressure and disrupt traditional trade rhythms associated with broiler meat,” the report says. 

South African food inflation overall slowed to 3.9% on an annual basis in July from 4.1% in June, its lowest level since January 2020. 

Read more: Relief in sight as annual consumer inflation slows to three-year low of 4.6% in July, rate cut looms). 

If Absa’s forecast pans out, poultry will help to maintain this downward trend. DM