COMPANY COMMENT: Astral investors expect rebalancing of prices
'Investors are obviously hoping the sharp drop in grain prices will help to boost profit by reducing input costs'
So far, 2017 has been a good year for Astral Foods. Although the share price has flattened out in the past few weeks at about R145, it is considerably higher than at the end of 2016. Investors are obviously hoping the sharp drop in grain prices will help to boost profit by reducing input costs. In addition, a stronger rand might help to curb imports, which over the past 12 months or so have been the single largest source of chicken in the local market.While Astral shareholders look set to reap some benefits, the developments may have come too late for some of the local producers and their thousands of employees. With so many experts on either side, it has become almost impossible to believe anything. Imports account for only about 16% of total chicken consumption in SA, says one side to support the argument they are not a substantial factor in the local market. But, says the other side, it is "bone-in chicken portions", which means imports are equivalent to about 30% of chicken prod...
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