Elevated meat prices remain a drag on food inflation

Source: ©Pavel Ilyukhin via 123RF

Monthly, food inflation fell by 0.8% month-on-month (m/m) led by declines in cereal products and vegetables, including a slowdown in the meat category.

Cereal prices continue downtrend

After a 2025 peak of 4.8% year-on-year in April, cereal products inflation extended its downtrend for the fourth consecutive month to 1.5% year-on-year in August as strong seasonal harvests weighed heavily on raw commodity prices. South Africa’s 2024/25 commercial summer crop harvest estimate saw a further upward adjustment from July by 4.3% to 19.55 million tonnes, a whopping 25.9% upswing from last year’s level.

This is 2.6% shy of the record high of 20.07 million tonnes achieved during the 2022/23 season. At the same time, the stronger rand continued to pose downside risk on grain and oilseed prices. Consequently, maize prices fell by 17% and 3% year-on-year for the white and yellow varieties, respectively, to an average of R4,433/t and R3,931/t in August 2024.

Meat prices remain key inflation driver

Although posting a modest monthly deceleration of 0.4% month-on-month in August 2025 from 3.3% month-on-month in July, meat inflation remained the biggest drag on overall food inflation after quickening further to a 30-month high of 11.3% year-on-year.

Foot-and-mouth disease (FMD) has been the biggest catalyst for the volatility in meat prices over the past few months. However, the FMD-induced supply crunch dissipated somewhat recently due to the combination of an export ban that raised local availability and the improved slaughter rates.

Although earlier restrictions on chicken imports from Brazil were lifted, volumes have not recovered to make a significant dent in prices. Poultry import volumes in July were down by 34.9% month-on-month and 70.9% year-on-year at 10,543 tonnes, with the year-to-July total down by 30.2% year-on-year at 176,703 tonnes.

The intermittent FMD outbreaks remain a huge uncertainty in the market due to their interruptions to the slaughter pattern and the subsequent price volatility.

Outlook for food inflation

With better seasonal production conditions in the forecasts for the 2025/26 crop season, coupled with a resurgent rand exchange rate, we can expect further downside surprises in food inflation outcomes in the medium term.