With Freedom Day approaching, many will be tightening up the locks on their wallets and spending impulses as the cost of living crisis in South Africa, coupled with Eskom’s load shedding, South African consumers are feeling the pressure.
It could get worse as the South African Poultry Association (Sapa) has warned that the prices of eggs could be sky-rocketing soon as well.
Sapa’s general manager: Egg Organisation, Dr Abongile Balarane, said yesterday that while eggs remained one of the most affordable animal protein sources, it was becoming increasingly more expensive for farmers to produce this highly versatile and nutritious protein source.
“From 1 April 2023, the Eskom tariff increase of 18.5% kicked in, adding more pressure to the egg producers. It is estimated that the variable costs to produce an egg, which includes electricity, fuels and feed, has increased from previously circa 70% and is now closer to 80%,” Balarane said.
“Recently, these soaring costs, combined with Eskom’s erratic electricity supply causing multiple daily electricity blackouts, which severely negatively impacts egg production and packing, have forced many producers (particularly small producers) and some pack stations to exit the industry. The Sapa stats confirm that the entire value chain is also affected at the primary egg production level, with the day-old pullets hatched expected to decline possibly by 35%, with the point of lays Hens (PoL) replacement also expected to be down by 11%,” he warned.
“During these darkest of days, I am confident that our resilient egg producers will continue to offer South Africans their much-loved animal protein source,” Balarane said.
Consumers in South Africa have had a rough start to the year, as 2023 was welcomed in darkness thanks to Eskom’s load shedding, which has continued all the way through until April and is still going, with the stages varying from day to day almost.
Inflation is also spiralling out of control, and in efforts to bring the rate down, the South African Reserve Bank (SARB) has been on an aggressive trend of increasing the repurchase rate (repo rate).
The country’s economy contracted in the final quarter of 2022, and many analysts and economists predict that the first quarter of 2023 will show similar results, as almost every economic data released this year, from PMI to mining and CPI, showing a decline.
Motorists have also had to contend with see-sawing fuel prices, as many have said that South Africa is heading for a technical recession.
BUSINESS REPORT