Astral Foods has issued a warning about the country’s deteriorating power and water infrastructure, which is having an impact on the poultry industry.

Astral Foods, the largest poultry company in South Africa, has issued a warning about the country’s deteriorating power and water infrastructure, which is having an impact on the poultry industry.

The group emphasises the significance of profitability in the food sector to ensure ongoing food production for the country and claims that the challenges are putting the country at risk of becoming dependent on food imports.

According to Ess-Feed, Astral Foods reported a significant decline in first-half profits due to worries about food security, social unrest, and the possibility of political instability and policy uncertainty in the run-up to the 2024 elections.

The dividend was passed after Quantum Foods’ poultry operations were impacted by high feed costs, load shedding, and low egg prices, according to Business Report, which also notes that the company’s headline earnings per share fell 82% to 2.9 cents in the six months to 31 March.

Operating income decreased 57%. The trading environment during that time was the most difficult Quantum Foods had faced since going public in October 2014, according to the company’s directors.

5 commercial chicken farms in the Western Cape were recently impacted by a highly pathogenic avian influenza (HPAI) outbreak, according to South Africa’s news24.

There are concerns that the virus will spread and negatively affect food security despite the fact that the province’s Agriculture MEC Ivan Meyer stated that more than R60 million would go towards preventing and controlling animal diseases as part of the agriculture department’s 2023–24 budget.

The world’s largest exporter of chicken meat, Brazil, recently confirmed the discovery of bird flu, according to Poultry World. Brazil provides a significant portion of the chicken consumed in South Africa.

If the avian flu crisis has an impact on Brazil’s poultry industry and exports, it’s feared that South Africa may run out of chicken, which would drive up prices. South Africa has enough poultry stock in cold storage, according to ESS-Feed, for four months.

According to Statistics SA, there are severe food shortages and hunger among South African households, with 2.1 million households (11.6%) reporting hunger in 2021.

The situation would get worse as a result of the sudden rise in food prices brought on by supply chain problems. Major causes of food insecurity were identified as a lack of money to buy enough food and restricted access to basic groceries.

Even though eggs are still one of the least expensive animal protein sources, farmers are finding it more and more expensive to produce them. According to the South Africa Poultry Association, an 18.5% Eskom tariff increase went into effect on April 1, 2023, putting more pressure on egg producers.

The variable costs to produce an egg, which include electricity, fuels, and feed, are thought to have increased from previously being around 70% to being closer to 80%.

Many egg producers and some pack stations have been forced to leave the industry as a result of these costs and the erratic electricity supply that results in daily electricity blackouts, adding to the uncertainty surrounding the product and its price.