The raw material trade in South Africa has been in turbulent waters for the past three years due to COVID-19, the conflict between Russia and Ukraine, foot-and-mouth disease, load shedding, and the latest contributor, bird flu.
The influence of bird flu on raw material prices can vary depending on several factors. Bird flu can affect poultry populations, leading to the culling of infected birds and disruptions in poultry production. This, in turn, can impact the supply and prices of raw materials associated with the poultry industry, such as chicken feed, which includes sunflower oilcake, wheat bran, and soya oilcake. When there are outbreaks of bird flu, these raw materials might experience price fluctuations due to changes in demand and supply.
Additionally, consumer perceptions of food safety can influence demand for poultry products, which can also affect prices. If consumers are concerned about bird flu transmission to humans, they might reduce their consumption of poultry, leading to shifts in market dynamics and pricing.
It is important to note that the extent of these price fluctuations can depend on the severity and geographic spread of the bird flu outbreak. Moreover, government responses, regulations, and trade policies can play a significant role in mitigating or exacerbating price changes in raw materials and poultry products.
Load shedding, or scheduled power outages, can have a significant impact on the production of animal feed and the availability of raw materials in several ways:
Load shedding can disrupt the production processes in animal feed manufacturing plants. Many of these processes rely on electricity for mixing, grinding, drying, and packaging. Interruptions in power can lead to delays and decreased production efficiency.
Manufacturers may need to invest in backup power sources, such as generators, which can increase operational costs. These costs may be passed on to consumers in the form of higher feed prices.
Load shedding can affect the transportation of both raw materials and finished animal feed products. Electrically powered transportation and logistics systems may be disrupted, leading to delays in the delivery of supplies or products.
Alicia van der Spuy
Raw Material Trader
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