INDUSTRY FACES MANY CHALLENGES

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INDUSTRY FACES MANY CHALLENGES
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INDUSTRY FACES MANY CHALLENGES

Over the past three years, challenges in livestock markets have ranged from disease issues to consumer income pressures, according to the autumn edition of Absa AgriTrends 2024.

Beef market dynamics

Despite an increase in load-shedding frequency and intensity in the fourth quarter or 2023 and the first months of 2024, beef prices responded favourably to an increase in festive season demand.

Looking ahead

Absa expect beef prices to follow an upward trend over the medium term. This is supported by improved export prospects to markets such as Saudi Arabia, with the value of importing beef of around USD 740 million.

Locally, demand is expected to show some recovery as interest rates ease and load-shedding trends lower.

South Africa’s beef market sees potential growth amidst global trends, yet lingering electricity issues restrain price surges.

Lamb and mutton market dynamics

In contrast to beef, lamb prices traded lower during the third quarter of 2023.

This was on the back of a surge in export supply out of Australia as dry conditions from the current El Nino resulted in rapidly increasing slaughtering and exports.

In previous editions of this research document, the opportunities for export growth from South Africa, especially to the Middle East has been mentioned. Unfortunately, Middle Eastern price dynamics during 2023 did, however, not support industry performance. Absa’s view is, however, that this market will remain an important off-set point, as local demand is expected to remain soft. This, combined with mounting supply challenges such as theft and extended dry periods, would need to be mitigated through increased sales in premium export markets.

Looking ahead

Lamb and mutton prices are expected to follow a modest upward trend over the outlook period as local consumer pressures ease and export opportunities to Middle Eastern markets regain momentum. This is likely to be further supported by structural production in the industry, which is constraining supply.

Source : Absa AgriTrends