Lower feed prices should help South Africa’s chicken producers to limit price increases this year, according to a report in the Daily Maverick.
Quoting Absa’s latest AgriTrends report, the publication says poultry price increases could drop to an annual rate of 1% for some products, down from double digits as production lifts in Brazil and the rand strengthens.
Other factors cited by Absa are a stronger South African currency and robust growth in production by key global suppliers such as Brazil.
“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.
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, the Daily Maverick said.
