SOUTH AFRICA – South Africa’s poultry industry is grappling with a looming shortage of chicken meat as it battles a severe bird flu outbreak and persistent power cuts.
The situation has raised alarm in the country, with major producers like Astral Foods and Quantum Foods reporting significant losses and disruptions to their operations.
Astral Foods, one of the largest poultry producers in South Africa, recently issued a trading update predicting a substantial financial setback for the year ending on September 30, 2023.
The company expects to report a headline loss ranging from US$0.9564-US$0.9596 per share, a stark contrast to the R27.62 profit achieved in 2022.
South Africa’s electricity crisis has been cited as the major factor fro the downturn impacting the poultry industry, driving up operational costs and straining resources.
The situation has been further as a result of the widespread outbreak of bird flu in Gauteng and Mpumalanga provinces.
According to Astral Foods the outbreak is characterized as “the worst” and the company has issued a warning that it had already led to shortages of table eggs, with the supply of poultry meat likely to be negatively affected in the coming months.
Astral Foods estimated that the total costs of load shedding, including capital expenses, for the fiscal year would reach approximately 1.9 billion rand, significantly contributing to its financial decline.
“The impact of unpredictable electricity supplies extends beyond financial losses. The poultry sector, in particular, faces challenges in maintaining ventilation systems, adhering to slaughter schedules, and processing chicken efficiently.”
Astral Foods disclosed that it was spending a staggering R45 million per month to operate diesel generators to keep its operations running.
Meanwhile, Quantum Foods has reported a devastating toll from the bird flu outbreak.
The company revealed that nearly 2 million chickens worth R106 million had been lost due to the avian influenza outbreak.
Quantum Foods, a leading player in the African poultry market, noted that the high-pathogenic avian influenza (HPAI) had caused substantial deaths among its laying and breeding birds, compounding problems created by frequent power cuts.
The HPAI outbreak’s overall impact on South Africa’s poultry industry remains uncertain, and its financial consequences for Quantum Foods will depend on various factors, including the volume of eggs available for sale in the future.
It added that major poultry producers are reeling from financial losses and operational challenges, while consumers brace for the possibility of higher prices and supply disruptions in the coming months.
“The situation underscores the urgent need for a coordinated response to mitigate the impact on both the poultry industry and South Africa’s food supply chain.”