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Food shortages

South Africa faces chicken meat shortage as power crisis, bird flu hit producers

South Africa faces chicken meat shortage as power crisis, bird flu hit producers
South African battery chickens in a poultry farm in Cape Town, South Africa. EPA/NIC BOTHMA

Sept 21 (Reuters) - South Africa faces chicken meat shortages in the coming months as a bird flu outbreak and electricity cuts ravage the poultry industry, the country's largest producer Astral Foods ARLJ.J said on Thursday.

In a trading update, Astral said it expected to report a headline loss between 18.02 rand and 18.08 rand ($0.9564-$0.9596) per share in the year to Sept. 30, compared to a profit of 27.62 rand last year, mainly due to persistent power cuts.

Astral said the electricity crisis had disrupted the poultry industry and raised operating costs, which had now been compounded by additional expenses related to “the worst” bird flu outbreak that has spread across South Africa’s Gauteng and Mpumalanga provinces “at an alarming rate”.

“The bird flu has already caused short supplies of table eggs into the market, and it is expected that the supply of poultry meat into the value chain could be affected negatively in the coming months,” Astral said.

Africa’s most advanced economy is enduring frequent electricity cuts blamed on its ageing coal-fired fleet of power generating plants. State-owned utility Eskom is routinely reducing power supply to businesses and households for several hours daily, a process called load shedding locally.

“The total costs of load shedding, including capital costs of 200 million rand, for the group for the financial year will amount to approximately 1.9 billion rand. This has been the main reason for the severe decline of Astral’s results for the year ending 30 September 2023,” the company said.

Businesses have had to spend millions on alternative sources of power, such as diesel generators and solar plants. For the poultry sector, erratic electricity supplies affect ventilation systems, slaughter schedules and chicken processing.

Astral said it was spending 45 million rand every month to run diesel generators.

By Nelson Banya

(Reporting by Nelson Banya; Editing by Mark Potter)

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