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JSE-listed food producers are normally seen as defensive and relatively consistent portfolio stocks. But this cannot be said of the poultry sector; the producers of the ubiquitous protein beloved by South African consumers live a rollercoaster life of earnings cyclicality, and at present the profitability of the sector is stuffed.

High soft commodity prices, erratic load-shedding — leading to the use of expensive self-generated power — alongside the effects of the worst outbreak of highly pathogenic avian influenza (HPAI) experienced in South Africa, is now taking its toll on egg and poultry sector producers. The businesses of Astral Foods and, latterly, Quantum Foods, are severely affected...

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