SA poultry producers’ shares down as US deal kicks in

By Reuters

REUTERS/Ina Fassbender
REUTERS/Ina Fassbender

JOHANNESBURG – South Africa’s poultry producers’ shares were mostly down on Monday in a weak market after Pretoria opened its doors to US chicken imports under a deal reached at the weekend.

Poultry producer Astral Foods fell 4.05 percent to 172.44 rand by 1405 GMT, Quantum Foods Holdings fell 3.30 percent to 3.52 rand.

RCL Foods, formerly Rainbow Chicken bucked the trend to rise 1.49 percent to 17.76 rand.

Astral warned in May that if a quota on US poultry imports is agreed to on the back of the AGOA renewal, it was likely to negatively impact local producers due to additional volumes of poultry products in the local market.

See also: Chicken Tarriffs: US Senators threaten to attack SA’s access to AGOA

Analysts said the market sentiment was generally negative, due to the weak local currency and it was too early to determine whether or not shares of South African poultry producers will be hard hit by the agreement.

“The market is trading negative today. Industrial stocks right over the board are taking a bit of a hammering. In particular, you can look at the chicken stocks, they dropped,” said Rigardt Maartens, a portfolio manager at PSG Securities.

“Once the market starts to recover, all the industrial shares and food shares will start to pick up again.”

On Saturday South Africa’s trade and industry minister said the US will export 65,000 tonnes a year of poultry shipments to South Africa, a deal which should help smooth the passage of the African Growth and Opportunity Act (AGOA).

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