Astral foods, South Africa’s second-largest poultry producer, has announced that 150 jobs will be cut, in the wake of grain prices reaching record highs and the increasing prevalence of cheaper bird imports, Bloomberg reports.
Astral Foods CEO Chris Schutte stated in an email response that the reduction were “directly related to ‘cutbacks’ on production […] Further cutbacks and possible retrenchments will follow.”
The worst US drought in years is pushing local grain prices to record highs. Given that 75% of the production cost is taken up by the grain price and the increasing flood of cheap imports, poultry producers are struggling to pass on the added costs to the consumers.
Poultry imports to South Africa are at a record according to Astral, which employs more than 12,000 full-time and contract employees.
South Africa in February imposed additional import tariffs of as much as 63% on certain cuts of chicken from Brazil. The Latin American nation filed a dispute against South Africa with the World Trade Organization over the taxes on June 21, seeking consultations under the dispute settlement system.