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Potential for Shell Egg Exports to South Africa Limited

08/01/2018

According to a GAIN Report dated July 26th 2018, South Africa imported 50 tons of shell eggs valued at $74,000 from Brazil during the first five months of this year.  Importation was necessitated by the loss of approximately 7 percent of the nation’s flock in mid- to late 2017 following exposure to H5N8 avian influenza.  The resulting decline in availability of eggs was responsible for an increase in retail prices which at present are in the region of $2.20 per dozen about 16 percent above 2017 prices prior to the HPAI outbreak. The RSA inflation rate is currently at five percent.

South Africa has declared the U.S. to be eligible to export shell eggs but the potential volume to be supplied will be understandably small and in competition with Brazil and the E.U.

 

As with South Korea, once flocks are repopulated, supply will match domestic demand. Based on previous experience availability will overshoot demand given the large number of younger flocks coming into production.

 

Quantum Foods a major egg producer in South Africa reported an increase in operating profit of 470 percent to $20 million for the first half of fiscal 2018 ending March 31.  Although the company lost 240,000 hens in the Western Cape the rise in egg prices more than compensated for reduced flock size.  The egg production component of the agribusiness company contributed 65 percent to total company profit amounting to $9 million.  A sharp reduction in the cost of ingredients following the severe drought in 2016 also contributed to improved margins enjoyed by both the broiler and egg segments of the poultry industry in the Republic of South Africa.