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South Africa’s Poultry Industry: Caught in the Grip of Crisis with Bird Flu and Power Shortages

In the heart of South Africa’s poultry industry, a perfect storm is brewing. A relentless bird flu outbreak, coupled with crippling power shortages, threatens to cast a long shadow over the nation’s poultry producers. As the crisis deepens, major players like Astral Foods and Quantum Foods are grappling with significant losses and unprecedented disruptions to their operations. Let’s delve into this unfolding story of resilience and adversity in South Africa’s poultry landscape.

Astral Foods: From Profit to Peril

Astral Foods, a giant in South Africa’s poultry sector, recently sent shockwaves through the industry with a grim trading update. The company, which enjoyed a R27.62 profit in 2022, now anticipates a headline loss ranging from US$0.9564 to US$0.9596 per share for the year ending on September 30, 2023. The culprit behind this financial nosedive? South Africa’s ongoing electricity crisis, which has sent operational costs skyrocketing and resources into a tailspin.

Load shedding, a recurring nightmare for South Africa, has inflicted severe wounds on Astral Foods. The company estimates that the total costs, including capital expenses, for dealing with power outages will soar to approximately 1.9 billion rand for the fiscal year. Beyond the financial toll, the erratic power supply has hampered critical operations, from maintaining ventilation systems to adhering to slaughter schedules and processing chicken efficiently.

To keep its operations running, Astral Foods is burning through a staggering R45 million each month, running diesel generators. The weight of this crisis extends far beyond balance sheets; it’s a battle for survival.

Quantum Foods: A Costly Battle Against Bird Flu

Quantum Foods, another stalwart in the African poultry market, finds itself in a heart-wrenching struggle against the avian influenza outbreak. Nearly 2 million chickens, valued at R106 million, have fallen victim to this relentless menace. The high-pathogenic avian influenza (HPAI) has wreaked havoc among Quantum Foods’ laying and breeding birds, compounding the turmoil caused by frequent power cuts.

The extent of HPAI’s impact on South Africa’s poultry industry remains uncertain, and the financial toll on Quantum Foods hinges on various factors, including the availability of eggs for sale in the future. As major poultry producers reel from financial losses and operational hurdles, consumers brace for the possibility of higher prices and potential disruptions in the poultry supply chain.

The Urgent Need for a Coordinated Response

As South African poultry producers weather this storm, there is a pressing call for a coordinated response to mitigate the crisis’s impact on both the industry and the nation’s food supply chain. The situation serves as a stark reminder of the resilience required in the face of adversity and the imperative to secure South Africa’s food security.

In conclusion, South Africa’s poultry industry finds itself at a critical juncture, battling against formidable odds. The convergence of bird flu and power shortages threatens not only the livelihoods of producers but also the accessibility of poultry products to consumers. It’s a sobering reminder of the fragility of supply chains and the need for collaborative efforts to safeguard the nation’s food security in these challenging times.

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