17 October 2023
By: Nico van Burick
Although more than 100 poultry farms – mostly commercial – have reported bird flu cases, the impact on food price inflation can be curbed if import and disease control measures are successful.
The increase in egg prices could have a temporary impact on short-term food inflation but it should fall or stabilise afterwards, according to Wandile Sihlobo, chief economist of the agricultural chamber Agbiz.
He says the price hikes have raised concerns about food inflation. What matters, he believes, is how long the higher prices will persist.
“One must also realise that the influence of eggs in the food inflation basket is about 0,4%, meaning it does not have a significant impact on the overall inflation rate. Other poultry products weigh 2,09% in the inflation basket but their prices have not risen significantly at the retail level as eggs have.
“There is also a relatively good stock of poultry products available, and trade measures are being considered. No shortages are expected in the foreseeable future.”
Sihlobo says the provinces most affected are Gauteng, Mpumalanga, Free State, Limpopo and North West.
Two meetings have recently been held to find solutions to immediate problems. One focused on the retail egg shortage and what can be done about it, the other on the spread of the virus and how to handle it.
The government and stakeholders are considering the import of fertile eggs to replenish the poultry population, as well as the import of eggs in powder and liquid form for the baking industry so that more eggs are available for retailers. Discussions about possible vaccinations and protocols are continuing.
Sihlobo says with a temporary rebate on import tariffs and dumping duties being investigated, it must be taken into account that the industry is going through a difficult time after years of higher feed costs and load-shedding that have driven up costs significantly. Bird flu is an additional problem that puts more pressure on the industry.
“Therefore, any changes to trade policy must strike a balance between consumers’ wellbeing and the sustainability of the local poultry industry,” he says.
“It is a very difficult time for the poultry industry, and the financial implications of bird flu will become clearer in the coming weeks.
“Consumers will experience a scarcity of chicken eggs, but we expect that with the necessary interventions being planned, the shortages will not last too long and prices will decrease as stocks become available.”
